Coronavirus: JLR Midlands plant to stay shut until August

One of Jaguar Land Rover’s key British plants will remain closed until at least mid-August as the industry grapples with sluggish demand amid the COVID-19 crisis.

Sky News understands that JLR, Britain’s biggest carmaker, has informed suppliers that its Castle Bromwich site in the Midlands will not resume production until 10 August at the earliest.

The extended shutdown at the plant, which produces Jaguar XE, XF and F-Type Jaguars, reflects torrid conditions across the sector, with Bentley Motors becoming the latest manufacturer to confirm permanent job losses on Friday.

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Virtual certainty? Bankers ask if success of remote roadshows will last

HONG KONG/NEW YORK (Reuters) – Who needs expensive lunches at glitzy hotels and fancy restaurants to court investors for bond deals or the sale of new shares on the stock exchange?

In a world governed by quarantine and social distancing rules, even lead managers on multi-billion dollar deals have had to curtail travel and drop the personal touch in favour of video conferences and phone calls to woo potential investors.

Warner Music Group is one of more than a dozen companies that launched an initial public offering (IPO) in the aftermath of the COVID-19 pandemic and saw their shares soar on the first day trading.

“The wear from a virtual roadshow is much less than the wear and tear on the old normal roadshow. I was pleasantly surprised,” Warner Music Group chief executive Stephen Cooper said in an interview following this company’s IPO this week.

Some investors were also happy with the switch, because they saved time travelling to meetings with companies and their IPO advisers.

“When you meet face-to-face, you have to get everyone together into the lift, some people need to get their Starbucks… that one hour turns into one-and-a-half hours,” said Khiem Do, head of Greater China investments at Barings in Hong Kong.

All over the world, companies and their advisers have given up on the traditional multi-city investor roadshow – lasting up to two weeks – in favour of virtual sessions e investors that only last a few days.

So far the change has worked. U.S. IPOs excluding those of special purpose acquisition companies have yielded average gains of 35%, according to data firm IPOScoop. The S&P 500 Index has risen only around 6.6% in that period.

“In New York City you would normally do six or seven one-on-one meetings plus a group event. Boston is about the same. Now you can do at least nine in a day with no travel time,” said Taylor Wright, co-head of U.S. equity capital markets at Barclays Plc.

However, Wright and other bankers interviewed by Reuters questioned whether virtual roadshows will completely replace physical gatherings when the pandemic subsides. They said that many companies behind the IPOs of the last few weeks had warmed up investors in person before the pandemic, and younger companies may not be able to court investors only virtually.

For example, coffee producer JDE Peet’s raised 2.25 billion euros ($2.50 billion) in Amsterdam last week, in Europe’s biggest IPO of the year with a virtual roadshow that lasted just three days. It only managed to do so because the company and its advisers had already met in person with many potential investors, bankers on the deal said. [nL8N2DE0L9]

JDE Peet’s did not immediately respond to a request for comment outside business hours.

“If roadshows cannot carry on, I feel some investors won’t be willing to invest as happily,” said Zhenro Properties chief financial officer Kenny Chan, speaking in mid-May as the company raised $200 million via online roadshows in Asia’s first junk-rated bond for almost two months.

Many bankers and executives said they missed the social interaction, as well as the ability to ask questions quietly after in-person meetings.

Moreover, many of the IPOs that were successful in the last few weeks, including business intelligence platform ZoomInfo Technologies Inc and insurance policy comparison website SelectQuote Inc, were of well-established companies. Some IPO advisers cautioned that some startups and young less-known companies will struggle to pique investors’ interest without wooing them in person.

“Gathering in a hotel ballroom and listening to a roadshow presentation is just a different dynamic and vibrancy,” said Jocelyn Arel, a partner at law firm Goodwin Procter’s corporate and technology companies group

“I think it’s harder for startups, as they’re still trying to network remotely through video.”

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Parliament: Plastic screens placed around podiums for safer speaking amid coronavirus outbreak

SINGAPORE – Transparent plastic screens have been placed around the podiums in the House as part of measures to make Parliament sittings safer during the Covid-19 outbreak.

Members, who now wear masks and take them off only when speaking, were also seen wiping down the microphones and podiums after speaking.

In an Instagram post on Thursday (June 4), Speaker of Parliament Tan Chuan-Jin said that the perspex screens were installed to facilitate safer speaking. He also thanked the Parliament team for setting them up.

The new screens, first seen at Thursday’s sitting, are the latest in a series of precautionary measures rolled out in the House since March.

For the first time on March 25, members sat further apart after new safe distancing measures were introduced, with some spread out in the galleries on other levels.

They also had to take breaks in separate groups to further reduce mingling, and use separate restrooms.

Mr Tan said then that the new steps were aligned to stricter safe distancing measures to prevent the spread of the coronavirus.

Late in May, President Halimah Yacob approved four other locations for Parliament sittings up till Nov 20. They were the Arts House, The Treasury, Civil Service College, and NTUC Centre.

The announcement came after a Bill was passed earlier that month to amend the Constitution to allow the House to meet in multiple locations if needed.

Installed perspex screens around the podiums in Parliament to facilitate safer speaking. Thanks to @parl_sg team for setting this up.

A post shared by Tan Chuan-Jin (@chuanjin1) on

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Mexico reports record toll of coronavirus deaths, new infections

MEXICO CITY (Reuters) – Mexican health authorities reported 1,092 novel coronavirus deaths on Wednesday, the country’s highest toll in one day so far, with total infections surging past 100,000 as the Latin American country emerges as a major center of the pandemic.

The number of deaths was more than twice the previous record, and daily infections were also at an all-time high of 3,912, although Deputy Health Minister Hugo Lopez-Gatell said some cases occurred several days earlier.

Lopez-Gatell attributed the sharp jump in the death toll to the results of a new mortality committee dedicated to better identifying which deaths in the country were caused by the virus.

“Over the past 20 or 25 days, we have had various cases that were slowly passed on to the registry, for various reasons,” he said. “A technical commission has specifically been carrying out complementary methods.”

The additions bring the total number of known cases to 101,238 and deaths to 11,729. Health authorities have previously said the real number is higher.

Mexico had planned to start reopening the country after measures designed to curb the spread of the coronavirus. Instead, deaths and new infections have scaled new peaks this week, dampening expectations for major changes.

Latin America’s second-largest economy is at an earlier stage of the pandemic curve than the neighboring United States.

President Andres Manuel Lopez Obrador’s government has been under U.S. pressure to reopen major sectors of the economy to reactivate supply chains underpinning billions of dollars of business.

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Coronavirus: Boris Johnson urges people not to gather with others indoors as weather worsens

Boris Johnson has urged people not to start gathering indoors as the weather worsens, warning it could undermine the progress made in the fight against the coronavirus.

Speaking at the latest COVID-19 news conference in Downing Street, the prime minister told Britons: “Some of you may be tempted to move the gatherings you’ve been enjoying outdoors indoors out of the rain. I really urge you: don’t do that.”

A total of 39,728 people have now died in hospitals, care homes and the wider community after testing positive for the coronavirus in the UK, an increase of 359 from the day before.

Sir Patrick Vallance, the government’s chief scientific adviser, said the country had to “tread very carefully” as it started to come out of the coronavirus lockdown.

He said there could still be as many as 8,000 new cases of the virus a day in the UK, while the rate of transmission of COVID-19 remained close to 1.

“We have relatively large numbers still not coming down fast,” Sir Patrick said.

“That gives relatively little room for manoeuvre. We have to tread very cautiously,” he said.

England’s chief medical officer, Professor Chris Whitty, said that although the COVID-19 alert level remained unchanged at 4, the lockdown could start to be eased.

He said this was because the government’s five tests were being met and the two measures were separate and not interlinked.

Mr Johnson said the government had eased the restrictions on gathering outside – with up to six people from different households allowed to meet provided they practise social distancing – “for a very specific reason”.

“The evidence shows the risks of transmission are much lower outdoors,” the PM explained.

“And the risks of passing on the virus are significantly higher indoors which is why gatherings inside other people’s homes are still prohibited.

“Breaking these rules now could undermine and reverse all the progress that we’ve made together.

“I have no doubt that won’t happen.”

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Big in China and tiny in the U.S., Fast Retailing seen weathering pandemic

TOKYO/BEIJING (Reuters) – The coronavirus pandemic is shredding the global apparel industry, stripping hundreds of billions of dollars from sales and thrusting big names like J.Crew into bankruptcy protection.

While no major fashion firms have been spared, Japan’s Fast Retailing (9983.T), owner of the Uniqlo brand and not far behind the world’s No. 2 H&M (HMb.ST) in sales, looks well placed to cope with the crisis better than rivals.

That’s thanks to legions of faithful Chinese fans like 25-year-old IT worker Niu Ran, whose wardrobe is crammed with Uniqlo basics like shirts and socks and was looking for more in a post-lockdown shopping trip.

“I like Uniqlo because it’s very easy to match and the quality is not bad,” he said, waiting in line to try on pants at a Uniqlo store in Wangfujing, Beijing’s prime shopping district.

“It satisfies all my needs, so I don’t need to spend time elsewhere.”

Led by Tadashi Yanai, Japan’s richest man, Fast Retailing has expanded aggressively in China with 750 Uniqlo stores, roughly the same number in its home market.

Mainland China has all but contained domestic transmission of the coronavirus with lockdowns lifted in most areas since March and the world’s no. 2 economy is widely expected to emerge from pandemic-induced pain faster than other countries.

In other parts of Asia too, key markets such as Japan, South Korea and Taiwan have been more successful than the West in curbing the virus.

In contrast, rivals mostly focused on the U.S. market like Gap Inc (GPS.N) or far more dependent on Europe like Zara-owner and industry leader Inditex (ITX.MC) and H&M, are expected to face a longer downturn.

“Asia is going to be much faster to bounce back in terms of willingness to spend, which will favour operators with a big presence in Asia,” said Honor Strachan, retail analyst at research firm GlobalData.

“In the mature western markets across Europe, the U.S. and Canada, we expect the recovery to be long and drawn out,” she said.

GlobalData predicts the global apparel market will lose $297 billion in revenue this year due to the pandemic, with the United States accounting for 42% of that lost spending.

Of Uniqlo’s 2,260 stores globally, just 51 are in the United States. Its inability to make strides in the world’s biggest clothing market has long been seen as an Achilles heel, but for the time being it may prove a blessing.

Asia, however, accounts for three-quarters of Uniqlo’s annual revenue and Greater China alone represents 20%.

While Strachan notes H&M and Inditex are some of the most resilient players in the market, Asia & Oceania make up just 15% of H&M’s annual revenue while at Zara, its “Asia and the rest of the world” category accounts for 23% of sales.

THE BASICS ADVANTAGE

Uniqlo’s long shelf-life items like Oxford shirts for work, chinos and underwear as well as its reputation for value for money are likely to resonate with consumers grappling with lost income or less job security more than the trend-based clothing of Zara and H&M, according to analysts.

“The quality is good and designs are classic,” said Jiang Xin, an internet company employee in Beijing, one of many Chinese shoppers interviewed by Reuters who said they felt Uniqlo quality was a cut above comparably priced brands.

Although Fast Retailing warned in April operating profit could slide 44% in the year to end-August, analysts expect a quick recovery assuming key markets are not hit by a large second wave of infections. With a large proportion of items no-frills basics, it is hoping to limit discounts.

“We will be looking to gradually sell off the excess stock to normalise inventory over the next 18 months,” CFO Takeshi Okazaki said on a call with analysts in April.

Fast Retailing declined to comment further on its business outlook for this article.

Rapid growth has brought Fast Retailing almost neck and neck with H&M. Last year the Japanese firm was more profitable with net income of around $1.5 billion compared to the Swedish chain’s $1.4 billion, though its $21 billion in revenue was some $3 billion less.

And while it still has a way to go before it matches Inditex’s annual sales of $31 billion, Yanai’s long-held goal of making Fast Retailing the world’s biggest retailer has looked less far-fetched in recent years.

But for that to happen, Uniqlo will have gain market share in the United States, analysts say, adding that it may have to offer more stylish items to get there.

“They still need to find a way to compete in the U.S.,” said Jefferies analyst Michael Allen. “The current crisis doesn’t change the equation for that.”

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Japan faces another wave of infections in Tokyo and Fukuoka

Fears of a second wave

After recording no new Covid-19 cases from April 30 to May 22, the city of Kitakyushu in Fukuoka saw 119 cases in the past 11 days, putting it on the front line of Japan’s second wave of infections.

Among them are 11 students from four elementary and junior high schools, prompting school closures again and the shutdown of public facilities such as art galleries that were allowed to reopen on May 18.

Over in Tokyo, 34 new cases were recorded yesterday – the first time since May 14 that the daily number of infections has risen above 30.

This marked a threefold increase from the 13 recorded on Monday, prompting Tokyo Governor Yuriko Koike to issue a “Tokyo alert” yesterday that could lead to renewed advisories for businesses to close and people to avoid non-essential outings.

This comes after the state of emergency was lifted in Fukuoka on May 14, and in Tokyo on May 25. “Small surges in cases had already been anticipated,” Dr Shigeru Omi, the deputy head of the government expert panel on Covid-19 response, told a news briefing. “The nature of this virus at this point in time is that it is impossible to reduce the level of transmission to zero.”

Unlike on April 7, when the emergency was first issued, Dr Omi said Japan’s medical infrastructure is now more robust to withstand the rise in case numbers. On this basis, there is no imminent state of emergency, he said, adding: “The bottom line is that we must quickly move to respond to the situation and to avoid the further spread of the disease by identifying the chains of transmission.”

But for all of Japan’s best efforts, about one in three cases in Kitakyushu’s second wave has no known transmission links. Clusters have also occurred at two hospitals and one elderly home.

In Tokyo, 12 of the 34 new cases yesterday remained untraced.

Since May 26, Tokyo has recorded 124 new cases, of which one in four was an employee or customer at an entertainment district.

The governor said the “Tokyo alert” was aimed at building awareness among residents of how widely infections are spreading in the capital. “It doesn’t mean we are (immediately) changing our plans to reopen social and economic activities, but we want to reiterate our request that people refrain from night-time activities.”

But it remains to be seen if her warning will fall on deaf ears, with many having embraced their newfound freedoms. Tokyo on Monday began phase two of its three-part plan to reopen businesses.

In the first phase, museums, libraries and schools were allowed to open, while the second phase lifted shutdown requests for cinemas, gyms and department stores. Crowds have returned to pre-emergency levels, with footfall in Ginza and Shibuya up 4 per cent and 6.7 per cent, respectively, compared with just before the decree was issued in April.

There were 17,000 cases in Japan as of last night, with 901 deaths, according to a tally by NHK.

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Outdoor seating only: Parisian cafes eke out space along sidewalks

PARIS (Reuters) – The Cafe de Flore in Paris, once a favourite drinking hole of Simone de Beauvoir and Jean-Paul Sartre, spread its tables along the pavement, in front of the neighbouring book store, and reopened on Tuesday for the first time in 11 weeks.

Locals could once again enjoy a morning espresso, albeit only at tables spaced a metre apart, as the government allowed cafes and restaurants to open outdoor terraces, lifted travel curbs within France and permitted sunbathing on beaches.

“We’re back at home,” said one regular, Rachel, at the cafe in the French capital’s chic Left Bank neighbourhood. “Morning time is coffee time. We’re rediscovering old habits.”

Across Paris, cafe owners encroached on sidewalks to maximise the number of tables they could set. Each had to submit their new configuration to the local authorities online and in the days ahead their new layout will be inspected.

Those without little or no outdoor seating have been less fortunate.

Across the boutique-lined Boulevard Saint-Germain from the Cafe de Flore, the Brasserie Lipp, which kept serving through World War Two but was shut down by the coronavirus pandemic, remained closed.

Even under a bright blue sky, business started slowly. Servers wore masks and said they were still finding their way under the new conditions. Some cafes replaced menus with chalkboards, others asked patrons to scan a barcode to bring up the menu on their smartphone.

At the Le Bourbon brasserie, staff set out about a dozen tables in a small square behind the National Assembly. Manager Jean-Pierre Viala said they were at the mercy of the weather gods, with rain forecast later in the week.

“It’s hard to predict how much food to buy in when you’re dependent on the weather,” he said.

Finance Minister Bruno le Maire on Tuesday promised a solidarity fund to help cafes and restaurants would run until the end of 2020. Many depend on the tourists who in normal times swarm through Paris, the world’s most visited city.

“We desperately need borders to re-open,” said Arnaud Lacroix, whose coffee and ice-cream bar is located opposite the fire-ravaged Notre-Dame of Paris cathedral.

In the past two years, his business has been hammered by anti-government “yellow vest” protests, the cathedral blaze and now the virus.

“We can’t hold out much longer,” he said.

(This story has been refiled to correct spelling in headline)

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UK COVID-19 death toll rises to nearly 50,000, Reuters tally shows

LONDON (Reuters) – The United Kingdom’s COVID-19 death toll neared 50,000 on Tuesday, confirming its place as one of the worst hit countries in the world just as Prime Minister Boris Johnson tries to ease the stringent novel coronavirus outbreak.

The toll now stands at 49,646, including death certificate data for England and Wales released on Tuesday up to May 22, previously published figures for Scotland and Northern Ireland, and recent hospital deaths in England.

Such a large death toll has prompted criticism of Johnson, who opposition parties say was too slow to impose a lockdown, too slow to protect the elderly in nursing homes and too slow to build a test and trace system.

Johnson’s government says that while it may have made some mistakes it is grappling with the biggest public health crisis since the 1918 influenza outbreak and that it has ensured the health service was not overwhelmed.

Still, the grim death toll surpasses even some projections by the government’s own scientific advisers.

In March, Britain’s chief scientific adviser said keeping deaths below 20,000 would be a “good outcome”. In April, Reuters reported the government’s worst-case scenario was 50,000 deaths.

Related Coverage

  • UK records almost 62,000 excess deaths during pandemic: ONS official
  • 'Often mistrusted': UK stats watchdog criticises COVID-19 test data

Unlike the daily death toll published by the government, Tuesday’s death certificate figures include suspected cases and confirmed cases of COVID-19, the respiratory disease caused by the novel coronavirus.

Epidemiologists say excess mortality – deaths from all causes that exceed the five-year average for the time of year – is the best way of gauging deaths from a disease outbreak because it is internationally comparable.

Some 62,000 more people than usual have died in the United Kingdom during this year’s coronavirus pandemic, according to the latest available data, an expert from the Office for National Statistics said on Tuesday.

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U.S. companies issue shares at fastest rate ever, selling the rally

NEW YORK (Reuters) – U.S. public companies sold more than $60 billion in shares in May, the biggest monthly haul ever, as they capitalized on a stock market rally fueled by hopes that the COVID-19 pandemic is subsiding.

The benchmark S&P 500 Index .SPX has risen around 40% off of recent lows, hit in late-March at the height of market panic during the coronavirus outbreak, and is now roughly 10% shy of all-time highs hit in February.

The whipsawing markets stunted companies’ ability to issue new shares and raise cash, with just $4.8 billion sold in March, the lowest monthly total since December 2018, Refinitiv data showed.

The market has rocketed back with $22.3 billion sold in April and $65.3 billion in May, the highest on record.

(GRAPHIC – U.S. public companies sell the rally: here)

The likes of Southwest Airlines Co (LUV.N) and cruise operator Carnival Corp (CCL.N) have issued new stock to raise money. Major shareholders in companies such as BlackRock Inc (BLK.N) and U.S. drugmaker Regeneron Pharmaceuticals Inc (REGN.O) have cashed out their stock, with the market rebound far from certain to last.

“We’re talking to a lot of companies around the fact that the market is here, you don’t know what lies in the economy to come,” said Ryan Parrish, head of Americas equity capital markets syndicate at Bank of America (BAC.N). “If you even remotely have a need you should get it done now.”

The share sales echo a similar trend in U.S. debt markets, where companies have raised more than $1 trillion so far in 2020.

As in debt markets, the balance of companies selling new shares has shifted from those facing an imminent cash crunch to those stocking up on rainy day funds.

“There are a whole host of companies that have been hugely impacted by COVID-19 and have had to recapitalize,” said Santosh Sreenivasan, head of equity-linked capital markets for the Americas at JPMorgan Chase & Co.

“Issuers that have seen their stock prices recover are now also taking the perspective that they don’t want to miss this window in case this rebound is short-lived,” Sreenivasan said.

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