Business

LONDON — Tesco will create 16,000 permanent UK jobs to meet a coronavirus-fuelled surge in online grocery demand, the supermarket giant said on Monday in a boost for the country's embattled retail sector. 

Britain's biggest retailer added in a statement that it expects "the majority" of jobs to be filled by temporary staff drafted in during the pandemic to cope with soaring home food deliveries amid the country's lockdown.

"Since the start of the pandemic, our colleagues have helped us to more than double our online capacity, safely serving nearly 1.5 million customers every week and prioritising vulnerable customers to ensure they get the food they need," said Jason Tarry, chief executive for Tesco UK and Ireland.

"These new roles will help us continue to meet online demand for the long term, and will create permanent employment opportunities for 16,000 people across the UK," he added in a statement. 

The new permanent positions are in addition to around 4,000 full-time jobs created by Tesco during the pandemic.

Some 47,000 temporary staff joined Tesco at the peak of the coronavirus, most of whom have reached the end of their contracts.

Pre-pandemic, online sales at Tesco accounted for about 9 per cent of total revenue.

That has jumped to more than 16 per cent, with Tesco expecting online sales this year to reach more than £5.5 billion ($7.1 billion, 6 billion euros).

Monday's update comes after major UK companies announced thousands of job cuts in recent weeks, notably across the aviation, energy and retail sectors, owing to COVID-19 fallout.

Britain's economy shrank by one fifth in the second quarter, more than any European neighbour, as the lockdown plunged the country into its deepest recession on record.

In October, the UK government is to end a furlough scheme that has been paying up to 80 per cent of wages for around ten million workers during the pandemic.

Analysts said this would result in soaring unemployment across Britain.

Travel sector warning 

The Association of British Travel Agents (ABTA) warned that more than 90,000 travel jobs have been lost or remain under threat owing to coronavirus fallout.

Far fewer Britons are heading abroad, particularly after the UK government reimposed quarantine on travellers returning from nations including Austria, Croatia, France, The Netherlands and Spain.

"Travel desperately needs the government in its next review to provide tailored support or tens of thousands more jobs will be lost," said ABTA Chief Executive Mark Tanzer.

The gloomy survey came after student specialist holiday firm STA Travel UK collapsed on Friday.

Among British retailers hit hard by virus fallout is Marks and Spencer, which last week said it was axing 7,000 jobs as wary customers steer clear of its stores, which mainly sell clothes and food.

NEW YORK - Video app TikTok said on Saturday it will challenge in court a Trump administration crackdown on the popular Chinese-owned service, which Washington accuses of being a national security threat.

As tensions soar between the world's two biggest economies, US President Donald Trump signed an executive order on August 6 giving Americans 45 days to stop doing business with TikTok's Chinese parent company ByteDance — effectively setting a deadline for a potential pressured sale of the viral video sensation to a US company.

"Even though we strongly disagree with the Administration's concerns, for nearly a year we have sought to engage in good faith to provide a constructive solution. What we encountered instead was a lack of due process as the Administration paid no attention to facts and tried to insert itself into negotiations between private businesses," TikTok said in a statement.

"To ensure that the rule of law is not discarded and that our company and users are treated fairly, we have no choice but to challenge the Executive Order through the judicial system," it said, adding it expects to file its suit next week.

TikTok's kaleidoscopic feeds of short video clips feature everything from hair-dye tutorials to dance routines and jokes about daily life. It has been downloaded 175 million times in the US and more than a billion times around the world. 

Trump claims TikTok could be used by China to track the locations of federal employees, build dossiers on people for blackmail, and conduct corporate espionage.

The company has said it has never provided any US user data to the Chinese government, and Beijing has blasted Trump's crackdown as political.

The US measures come ahead of November 3 elections in which Trump, who is behind his rival Joe Biden in the polls, is campaigning hard on an increasingly strident anti-Beijing message.

Trump and China 

Trump has increasingly taken a confrontational stance on China, challenging it on trade, military and economic fronts.

Shortly after Trump announced his moves against TikTok in early August, the United States slapped sanctions on Hong Kong's leader over the Chinese security clampdown after last year's pro-democracy demonstrations.

Microsoft and Oracle are possible suitors for TikTok's US operations.

Reports have said Oracle — whose chairman Larry Ellison has raised millions in campaign funds for Trump — was weighing a bid for TikTok's operations in the US, Canada, Australia and New Zealand.

The Trump administration has also given ByteDance a 90-day deadline to divest in TikTok before the app is banned in the United States.

The measures move away from the long-promoted American ideal of a global, open internet and could invite other countries to follow suit, analysts told AFP previously.

"It's really an attempt to fragment the internet and the global information society along US and Chinese lines, and shut China out of the information economy," Milton Mueller, a Georgia Tech professor and founder of the Internet Governance Project said previously.

ISTANBUL — President Recep Tayyip Erdogan on Friday said Turkey had made a historic discovery of gas in the Black Sea, but would still speed up contentious exploration in the Mediterranean that has pitted it against Greece and the EU.

Turkey hopes the discovery can help wean it off imported energy, including from Russia, which comes at a high cost at a time when the local currency is weakening and the economy is more fragile because of the coronavirus.

Erdogan said the 320-billion-cubic-metre deep sea find was made at a site Turkish vessel Fatih began exploring last month.

He added that he hoped to see the first gas reach Turkish consumers in 2023, the 100th anniversary of the birth of the modern republic.

"Turkey made the biggest discovery of natural gas in its history in the Black Sea," a delighted Erdogan said during a speech in Istanbul's Dolmabahce Palace.

"My Lord has opened the door to unprecedented wealth for us," he enthused.

The Fatih, Turkey's first drilling vessel, is named after Fatih Sultan Mehmet, the Ottoman Sultan who conquered Constantinople — current-day Istanbul — in 1453.

The vessel made the discovery in the Tuna-1 field off the coast of Eregli town in the northern province of Zonguldak after beginning the search on July 20, Erdogan said.

'Reasons to be cautious' 

The Turkish lira gained value against the dollar on Erdogan's promise on Wednesday to report "good news" on Friday, but fell after the size of the find was less than half of that suggested in initial reports.

Analysts were also wary of overplaying the discovery's significance, pointing out that deep sea drilling is expensive and takes time.

"There are reasons to be cautious," said Jason Tuvey, senior emerging markets economist at Capital Economics.

"For one thing, it will take time for the necessary infrastructure to be put in place before the gas can be extracted," he said in a research note.

Tuvey added "the boost to Turkey's external position may only be temporary."

Ozgur Unluhisarcikli, Ankara director of the German Marshall Fund, tweeted the discovery was "not bad at all [but] not a game changer either".

The volume of gas announced by Erdogan would cover Turkey's total natural gas needs for six years, at current consumption rates.

High energy import bill 

Turkish finance minister and Erdogan's son-in-law, Berat Albayrak, speaking aboard the Fatih, said the discovery and future potential finds could reduce Turkey's import-heavy trade balance by cutting its high energy import bill.

Turkey's energy import bill corresponded to two per cent of total economic output last year, according to Capital Economics, with most purchases coming from Russia, Iran and Iraq.

Turkey's Energy Market Regulatory Authority said in January the country's annual cost of energy imports was between $12 billion and $13 billion (10.2-11.1 billion euros).

This month, Erdogan ordered the resumption of controversial energy exploration off the southern coast close to a Greek island in disputed eastern Mediterranean waters.

The issue has put Turkey on a collision course with Greece, Cyprus and the European Union, and exacerbated tensions with France, which has stepped up its military presence in the region.

But Erdogan showed no sign of yielding to the EU's repeated call to immediately end the eastern Mediterranean search.

"We will accelerate our activities in the Mediterranean with the deployment by the end of the year of [drilling ship] Kanuni, which is currently under maintenance," he said.

"God willing we expect similar good news," Erdogan added.

Turkey dispatched the seismic research ship Oruc Reis accompanied by warships to the region on August 10, angering Greece who said the move threatened peace.

LONDON — British government debt has exceeded £2 trillion for the first time following massive state borrowing as the coronavirus pandemic pushed the UK economy into a record recession, official data showed on Friday.

At the end of July, total accumulated debt hit £2.004 trillion ($2.61 trillion, 2.2 trillion euros), the Office for National Statistics (ONS) said in a statement.

That was equivalent to more than 100 per cent of the country's annual gross domestic product, or total economic output, for the first time since 1961. 

By comparison, Apple this week became the first US company to have a market valuation totalling $2 trillion (£1.5 trillion), boosted as it is seen as a key winner in the new post-coronavirus economy.

Compared with July 2019, UK debt increased by £227.6 billion, reflecting the huge increase in borrowing needed to tackle the pandemic.

 'Significant strain' 

"This crisis has put the public finances under significant strain as we have seen a hit to our economy and taken action to support millions of jobs, businesses and livelihoods," finance minister Rishi Sunak said. 

"Without that support things would have been far worse."

Net borrowing between April and the end of July is estimated to have hit £150.5 billion, the ONS said.

Last month's figure alone came in at £26.7 billion, as the UK emerged from a strict lockdown imposed at the end of March to curb the spread of the coronavirus.

"Today's figures are a stark reminder that we must return our public finances to a sustainable footing over time, which will require taking difficult decisions," said Sunak, whose official title is Chancellor of the Exchequer. 

"It is also why we are taking action now to support the growth and jobs which pay for our public service, by helping businesses to reopen safely."

 Pound pummelled 

The pound fell by more than 1.0 percent against the dollar on Friday as the EU and Britain traded blame for the lack of progress after the latest round of post-Brexit trade talks, with Brussels warning that a deal looked unlikely.

Sterling was changing hands at $1.3074 in afternoon trade, compared with $1.3214 late Thursday. 

The pound is being punished "by Brexit talks which seem to be going nowhere," said Neil Wilson, analyst at Markets.com.

"The two sides are still far from reaching agreement on key terms" of their post-Brexit relationship.

 Retail recovery 

Separately, data showed that British retail sales jumped by 3.6 percent in July from June as shops, restaurants and pubs reopened.

"Retail sales have now regained all the ground lost during the height of the coronavirus restrictions as more stores open for trade and online sales remain at historically high levels," ONS statistician Jonathan Athow said. 

"While still below their pre-pandemic levels, both fuel and clothing sales continued to recover.

"Meanwhile, food sales fell back from their recent peaks as people started to venture back into pubs and restaurants," Athow said. 

Marks and Spencer, the British food and clothes retailer, announced this week that it was cutting 7,000 jobs as COVID-19 increasingly pushes customers to shop online. 

The company joins the likes of UK department store chains Debenhams and John Lewis, as well as pharmacy group Boots, in cutting thousands of jobs owing to pandemic fallout.

Britain's economy shrank by one fifth in the second quarter, more than any European neighbour, as the lockdown plunged the country into its deepest recession on record. 

Even though the UK economy is beginning to rebound as the government eases strict confinement measures — private sector output grew rapidly in August according to data Friday — analysts expect a surge in unemployment by the end of the year.

In October, Sunak plans to end the government's furlough scheme that is paying up to 80 per cent of wages for around 10 million workers during the pandemic.

NEW YORK — Apple on Wednesday became the first US company to reach $2 trillion in market value in the latest demonstration of how tech giants have benefited from the upheaval of the coronavirus.

The iPhone maker attained the distinction in mid-morning trading and was up 1 per cent at $467.02 near 15:20 GMT. The company had previously become the first giant to hit $1 trillion in market value in March 2018.

Apple is followed by other technology companies, including Amazon, Microsoft and Google parent Alphabet, all of which now have more than $1 trillion in market value.

Shares in Apple have roughly doubled from March lows, an astonishing performance which has lifted chief executive Tim Cook's net worth to $1 billion for the first time, according to a Bloomberg Billionaires Index calculation.

Even as other large tech firms have shot higher on robust demand during lockdowns, Apple has outpaced its rivals by delivering strong sales of gadgetry including wearables and tablets, along with new apps and services which have gained ground during the global health crisis.

In the past quarter ending in June, Apple reported profits climbed 8 per cent to $11.2 billion and revenues jumped 11 per cent to $59.7 billion.

Apple's rise comes amid a broader rally in technology shares as employees around the country shift to working at home amid the coronavirus pandemic and social distancing protocols. 

The tech-rich Nasdaq has hit records more than 30 times in 2020, including on Tuesday.

A major factor in Apple's success has been leadership from Cook, who took over just ahead of the death of Steve Jobs in 2011.

"He didn't invent anything, but what he has done is keep a firm hand on the tiller, steering the ship and keeping the culture intact," said analyst Laura Martin at Needham & Company.

"He deserves a lot of credit for making the most out of Steve Jobs's inventions."

Apple's rise comes amid a broader rally in technology shares as employees around the country shift to working at home amid the coronavirus pandemic and social distancing protocols.

In the most recent quarter, Apple enjoyed a modest rise in smartphone revenue and robust increases in sales of iPads and Mac computers amid elevated demand for remote education and work-from-home buyers.

The company also benefited from services such as digital payments and streaming and from increased sales in smartwatches as interest in health and fitness applications rises.

LONDON — Global stock markets marked time on Wednesday against a backdrop of recent massive gains, growing China-US tensions, fresh virus flare-ups and signs of a possible breakthrough in deadlocked US stimulus talks, dealers said.

Oil was in focus ahead of US stockpiles data and a virtual meeting of the Organisation of the Petroleum Exporting Countries (OPEC) and its allies to discuss their recent output cuts after crude prices were shattered by a coronavirus-driven plunge in energy demand.

The dollar, which on Tuesday hit the lowest level against the euro in more than two years on the prospect of more huge US stimulus, was little changed as the market waited on the Federal Reserve's minutes from its latest policy meeting.

"As for the oil market, traders are a bit cautious today because of the US crude inventory data" amid a supply glut, noted Naeem Aslam, chief market analyst at Avatrade.

"Traders are also keeping an eye on the OPEC+ gathering."

Wall Street highs 

On Tuesday, upbeat US data helped drive the S&P 500 to another record while the Nasdaq also pushed to an all-time high thanks to a surge in demand for tech stocks that are benefiting from lockdowns.

After Asian markets were mixed overnight, European markets were slightly firmer as Wall Street opened little changed.

Democrats and Republicans remain stalemated over what should go into another virus stimulus package but House Speaker Nancy Pelosi provided a ray of hope by saying her party could be willing to make cuts to its offer to seal a deal, then return to thrash out other issues after November's elections.

The $3.5 trillion package agreed earlier this year, combined with a wall of cash and loose monetary policies from the Federal Reserve (Fed), have helped US stock markets soar from their March troughs.

US-China woes 

Souring US-China relations remain a concern, with the latest salvo out of Washington coming in a warning to colleges and universities to sell any Chinese holdings in their endowments owing to proposed new rules that could see these firms de-listed. 

The announcement comes with the two superpowers locked in several stand-offs ranging from Hong Kong, trade and the coronavirus, and US accusations of digital espionage.

There is also some trepidation about a trade pact signed between the two in January, which observers say is the crucial issue, with any sign that it could be in peril likely to spark another sharp market drop.

But while talks on the deal were called off last weekend, there is a general feeling that both sides still want to keep it in place.

PARIS — With the race on to find a coronavirus vaccine, the biotech sector — from an investor's point of view — appears to be the new gold rush, promising often giddy returns, but analysts warn that the exuberance could be exaggerated.

According to the World Health Organisation, some 168 potential vaccines are currently in development, with countless billions of dollars both public and private money being pumped into the research. 

As a result, the share prices of small, innovative biotech startups — competing with pharmaceutical giants to develop a substance that will inoculate the world against COVID-19 and allow life for billions of people across the globe to return to some semblance of normality — have reached dizzying heights in recent months. 

US company Moderna, for example, whose vaccine candidate is in so-called Phase III of clinical trials — the last stage before regulatory approval — has seen its shares soar by 250 per cent since the start of the year.

Other, less well-known names such as Inovio or Novavax are doing even better, with their shares rocketing by a dizzying 350 per cent and even 3,500 per cent, respectively.

A small company like Germany's CureVac, which made its debut on the US Nasdaq stock exchange last week, has seen its valuation balloon to currently more than $10 billion. 

But analysts warn that such investments remain high risk and, like other stock market bubbles before them, could soon burst.

"When you buy biotech, you buy a kind of lottery ticket," said Gregori Volokhine, portfolio manager for Meeschaert Financial Services in New York.

"There will always be investors who try to win big. It was the same thing with the Internet bubble, with solar power, with electric cars, and now with COVID," he said.

Overheated expectations? 

With more than 21 million infections worldwide, 770,000 dead and the global economy turned upside down, the stakes for finding a vaccine could not be higher. 

As governments plough billions into smaller biotech companies and the reservation of advance doses of potential vaccines, it is little wonder that investors see the pharmaceuticals sector as some sort of El Dorado. 

Nevertheless, analysts warn that the market is in danger of overheating.

Many share prices "have gone above where they should be", said Chris Redhead, healthcare analyst at Goetzpartners 

Daniel Mahony, healthcare fund manager at Polar Capital, agreed. 

"What I worry about for the moment is that the market implies a really high percentage rate of success and each of these companies are going to sell billions of dollars worth of products," the expert said. 

"That just seems unlikely to me."

Adam Barker, analyst with Shore Capital, pointed out that, on average, a drug costs $2-3 billion to develop and bring to market.

And "the chance of any drug or any vaccine to be successful from Phase I all the way to the end of Phase III is about 10 per cent," he said. 

The shares of pharmaceutical majors such as Pfizer, Sanofi or GlaxoSmithKline have also performed well since coronavirus first emerged in China at the end of last year. 

But they have not risen quite as fast as those of their smaller rivals. 

That is because of the pharmaceutical sector's commitment to distribute an eventual vaccine at cost price and not to make a profit out of a global tragedy, analysts said.

 Market distortion 

The current appetite for biotech stocks is also attributable to the changed dynamic of vaccine development, analysts said.

"Historically, it would take 10 to 15 years to develop a new vaccine and now you have companies in Phase III [trials] six months after the pandemic hit the US," said Andy Acker, a biotech specialist with Janus Henderson. 

Analysts suggested that government cash could be distorting the market. 

"What the governments have done by putting all the money is that they make the small companies... able to compete with the big ones, they begin to manufacture risk," said Mahony at Polar Capital.

In Moderna's case, the US government has stumped up nearly $2.5 billion to support its research and to reserve vaccine doses.

Barker Shore Capital agreed.

"If the government comes and gives $100 million, it sort of makes it more feasible for small ones to compete with the big ones," he said.

Nevertheless, Chris Redhead at Goetzpartners also saw positive aspects. 

The injection of public money into smaller, innovative companies would not only help in the development of coronavirus programmes, he said.

It would "also support other programmes for infectious disease, or the next-generation vaccines. They will get more experience on how to produce vaccines for other diseases", he said. 

LONDON — Global stock markets were mainly firmer on Monday, extending gains as investors kept a wary eye on simmering US-China tensions and continued Democrat-Republican wrangling over a US coronavirus stimulus package.

Wall Street opened slightly higher after positive housing data and as the tech-rich Nasdaq continued to lead the market but then slipped back.

Dealers said the latest figures for new-build single-family homes hit an all-time high, highlighting one of the strongest parts of the US economy despite the upheaval caused by the coronavirus pandemic.

"The demand for new single-family homes continues to be strong, as low interest rates and a focus on the importance of housing has stoked buyer traffic to all-time highs," said National Association of Home Builders Chairman Chuck Fowke.

The data offset concerns about US-China relations after high-level talks between Washington and Beijing on the status of their "phase one" trade agreement did not take place Saturday, with no new date set.

US President Donald Trump has continued to ratchet up tensions with Beijing ahead of the November election in the face of opinion polls showing him trailing Democrat Joe Biden in key battleground states.

China on Monday slammed Washington for using "digital gunboat diplomacy" after Trump ordered TikTok's Chinese owner ByteDance to sell its interest in the Musical.ly app it bought and merged with TikTok.

Uncertainty over the status of the trade talks "has added to the frosty situation", noted David Madden, analyst at CMC Markets UK. 

"The lack of agreement between Republicans and Democrats in relation to the stimulus deal remains a concern too."

US stimulus deal expected 

Hopes for any movement before the end of the month are slim, but the consensus opinion is that a deal will eventually be struck.

"Despite the stimulus package appearing to be in a standstill, the markets appear to be taking the view that major fiscal legislation is inevitable," said AxiCorp's Stephen Innes.

While the coronavirus continues to flare up around the world, forcing the reimposition of containment measures, analysts said stocks will likely continue rising thanks to unprecedented backing from central banks.

In Asia, Tokyo's main stocks index closed down 0.8 per cent after data showed a record contraction of the Japanese economy in the second quarter.

"Investors cashed in on recent gains," said Toshikazu Horiuchi, a broker at IwaiCosmo Securities.

"GDP figures were largely within expectations" but reconfirmed the sizable impact of the coronavirus pandemic on the Japanese economy, Horiuchi told AFP.

The April-June GDP figures showed that the economy shrank a record 7.8 per cent quarter-on-quarter.

WASHINGTON — The US administration on Monday expanded its sanctions on China's Huawei, a move aimed at further limiting the tech giant's access to computer chips and other technology.

A Commerce Department statement added 38 Huawei affiliates around the world to the "entity list", claiming that the company was using international subsidiaries to circumvent the sanctions which prevent export of US-based technology.

Commerce Secretary Wilbur Ross said Huawei and its affiliates "have worked through third parties to harness US technology in a manner that undermines US national security and foreign policy interests".

US officials have argued Huawei poses a security risk because of its links to the Beijing government, a claim denied by the company.

The toughening of sanctions comes amid heightened US-China tensions and claims by Washington that Chinese firms are being used for spying, despite repeated denials.

President Donald Trump has sought to ban the wildly popular mobile application TikTok if it is not divested by its Chinese parent firm ByteDance.

Speaking on Fox News Monday, Trump claimed that Huawei "comes out and they spy on our country — this is very intricate stuff, you have microchips, you have things that you can't even see".

Huawei did not immediately respond to a request for comment.

Battle for 5G 

The Trump administration has banned Huawei from 5G wireless networks in the United States and has pressed allies to do the same.

In the meantime, Huawei became the largest global smartphone manufacturer in the past quarter, largely due to sales in the Chinese market, even as Washington moves to deny the company access to much of the Google Android system.

Secretary of State Mike Pompeo said in a separate statement that the Trump Administration "sees Huawei for what it is — an arm of the Chinese Communist Party's surveillance state".

Pompeo said the new sanctions were imposed "to protect US national security, our citizens' privacy, and the integrity of our 5G infrastructure from Beijing's malign influence".

The Commerce Department action affects Huawei affiliates in 21 countries including China, Brazil, Argentina, France, Germany, Singapore, Thailand and Britain.

The order blocks any of the companies from acquiring US-based software or technology used in products or components.

"The new rule makes it clear that any use of American software or American fabrication equipment to produce things through Huawei is banned and requires a license," Ross told Fox Business Network.

"So it's really a question of closing loopholes to prevent a bad actor from access to US technology, even as they try to do it in a very indirect, very tricky manner."

US officials said there would be no further extensions for the sanctions waivers from the Commerce Department which had been allowed to minimise disruptions.

That could mean Huawei handset owners might not be able to get updates to the Google Android operating system, nor would updates be allowed for wireless networks using Huawei equipment. Google did not immediately respond to a request for comment.

A Commerce Department official told reporters the only exception would be for updates related to cybersecurity vulnerabilities.

But the official offered no details on specific equipment or software updates.

The Commerce Department will review any request for a licence or waiver and that this "would be reviewed to determine whether it would advance our national security interests", the official said.