Business

NAALDWIJK, Netherlands —  It is tulip season in The Netherlands but this year growers are destroying millions of flowers a day, in unprecedented scenes as the coronavirus pandemic has cut demand.

Mountains of tulips, roses, chrysanthemums and other flowers destined for destruction have been waiting for the last week in the world's biggest flower market.

Brightly coloured blooms that might normally have been destined for a romantic gesture or Mothers Day are scooped up by diggers and then dumped in huge skips.

"The only solution is that we destroyed them," said Michel van Schie, spokesman for Royal FloraHolland, a huge auction house for flowers.

"This is really the first time that we have to do this. The Dutch auction already exists for more than a hundred years, and this is the first time that we are in such a crisis," he told AFP.

Royal FloraHolland said that between 70 and 80 per cent of the Netherlands' total annual production of flowers is being destroyed.

It's a bitter blow in a country where tulips are as much a symbol of national identity as windmills, cheese and clogs.

The shutdown of shops and businesses caused by the coronavirus outbreak sweeping the world will have "dramatic" consequences, says Prisca Kleijn, head of the Royal Association of Bulb Producers.

"We've never seen something like this before," she said. "There's no demand for flowers anymore because of the coronacrisis in the whole of Europe."

 The crisis has come at "the worst moment in the year" for tulip growers, she added.

"We have Mothers Day coming and the tulip growers start harvesting from January until April-May so it is right in the middle of the season, when they have to earn their money," said Kleijn.

With shoppers seemingly keener to stockpile essentials as the virus hits, the association said it was starting a campaign encouraging customers to "buy flowers, not toilet paper."

NEW YORK —  Wall Street stocks plunged again on Friday bringing the market's worst week since 2008 to a grim conclusion, as the worsening coronavirus pandemic hammers the economy.

After a volatile session which saw stocks spend part of the day in positive territory, the Dow Jones Industrial Average lost 4.6 per cent, or around 915 points, to end at 19,173.98, again dropping below the level when President Donald Trump was inaugurated in January 2017.

The broad-based S&P 500 dove 4.3 per cent to close at 2,304.92, while the tech-rich Nasdaq Composite Index tumbled 3.8 per cent to finish at 6,875.52.

The mounting list of restrictions on commerce have led economists to slash their forecasts by the day.

New York Governor Andrew Cuomo ordered non-essential businesses to close and banned all gatherings, a dramatic escalation of mitigation steps after the nation's most-populous state, California, on Thursday directed its 40 million residents to stay at home.

 IHS Markit now sees a contraction of 13 per cent in the second quarter after projecting a 5.4 per cent decline just four days ago.

More analysts now view the economic hit from the virus as a drag for the foreseeable future.

"The damage is not likely to pass in a month or two," FHN Financial said in a note. "Increasingly, it appears there will be a sharp drop in global activity, followed by a period of significant weakness lasting at least two quarters, followed by a partial recovery.

"In other words, for those savvy to the alphabet soup vocabulary of recession analysis, an L-shaped recession rather than a V-shaped recovery."

And Goldman Sachs warned of an "unprecedented surge in layoffs," citing data from US states, and a massive decline in revenues in many industries.

The Federal Reserve announced yet another slew of measures to boost liquidity, including a new program to inject funds into state and municipal money markets to keep the financial system from freezing up under the stress.

SINGAPORE — Oil prices pulled back from a massive early rally on Thursday as a plan by the European Central Bank (ECB) to buy huge amounts of bonds failed to calm  markets.

US benchmark West Texas Intermediate had surged more than 17 per cent at the open in Asian trade, recouping enormous losses Wednesday when prices hit 18-year lows.

But it lost a large chunk of those gains in the afternoon, and was trading up almost 12 percent at $22 a barrel.

International benchmark Brent crude initially jumped 8.5 per cent but lost ground later, and was up 4.6 per cent at $26 a barrel in late Asian business.

Asian stocks also made strong early gains on the ECB move but later slipped into negative territory as optimism about the plan was eclipsed by concerns the global economy is headed for a long, deep recession.

Oil markets have been hammered by collapsing demand as the virus prompts sweeping travel restrictions and business closures, and as major producers Saudi Arabia and Russia engage in a price war.

Thursday's early bounce followed the ECB's surprise announcement of a 750-billion-euro ($820 billion) scheme to purchase government and corporate bonds.

The so-called Pandemic Emergency Purchase Programme comes just six days after the ECB unveiled a stimulus package that also failed to calm nervous markets, piling pressure on the bank to open the financial floodgates.

But analysts predict oil prices have further to fall.

"With a global recession upon us with an indeterminate end, and a price war in full cry by oil producers, the world should probably be preparing itself (for) sub-$20 oil sooner rather than later," said Jeffrey Halley, senior market analyst at OANDA.

HONG KONG - Asian markets plunged on Wednesday, reversing an early rally fuelled by global stimulus pledges, including a more than $1 trillion package flagged by the United States.

With borders being shut and countries going into lockdown, there is a broad expectation the world economy will plunge into recession as markets convulse.

Dealers across the planet, who have been sent running for the hills, have been begging for government measures to mitigate the impact of the disease as trade collapses and businesses close.

On Tuesday, the US led the charge, with Treasury Secretary Steven Mnuchin saying officials were drawing up a package that could surpass $1 trillion, on top of $300 billion in deferred tax payments, making it among the largest federal emergency plans ever and far surpassing assistance during the 2008 global financial meltdown.

The measures would include cash payments to struggling families, with Mnuchin warning the pandemic could drive US unemployment to 20 per cent, a Republican Senate source told CNN.

"We don't want people losing jobs and having no money to live," Donald Trump said at a White House press conference, adding that the package "is a substantial number. We are going big."

Also on Tuesday, British finance chief Rishi Sunak unveiled an "unprecedented package" of government-backed loans worth £330 billion ($400 billion), while France and Spain announced tens of billions of euros in aid.

With the global airline industry reeling, Italy moved to re-nationalise the bankrupt former national carrier Alitalia, and France signalled it would not hesitate to take key firms into state control to protect them.

 'The missing fundamental'

The moves followed central bank interest rate cuts and pledges to make cash available to stop financial markets from jamming up.

However, Asia's morning burst gave way to an afternoon tumble, with traders fretting about the future as economists predict the US will slip into a recession, with warnings of a six per cent contraction during the second quarter.

"While all of these numbers appear impressive on the surface, the uncertain nature of how the virus will play out in the coming weeks means that the final bill could well be much higher," said CMC Markets analyst Michael Hewson.

Tokyo ended down 1.7 per cent, while Sydney plunged more than six per cent and Hong Kong lost more than four per cent, while Shanghai was 1.8 per cent off.

Seoul shed almost five per cent, Mumbai and Jakarta lost more than three per cent and Taipei retreated more than two per cent.

Singapore was 0.9 per cent lower but Wellington squeezed out gains.

US and European stocks rallied Tuesday but in early trade London, Paris and Frankfurt went into sharp retreat, while US futures also pointed to a rough day for Wall Street.

Before the market opened in Paris, French regulators banned short-selling for a month, extending an initial one-day halt, in an effort to curb steep losses.

"The missing fundamental ingredient for a sustainable recovery in risk appetite is some evidence that the growth of global COVID-19 infection rates is peaking," said Paul O'Connor, head of multi-asset at Janus Henderson Investors. "Clearly, we are not there yet."

Crude oil also reversed early advances, flirting with 17-year lows as demand for the commodity falls off a cliff with Saudi Arabia and Russia engaged in a price war that has ramped up output.

AxiCorp's Stephen Innes said the demand outlook remained "dismal", adding: "Indeed, the scale of the economic impact of COVID-19 on the major world economies is unparalleled."

In company news, shares in Fujifilm soared more than 15 per cent after China said a flu drug made by the Japanese firm could be effective in treating patients with the virus.

CARACAS - The International Monetary Fund (IMF) on Tuesday rejected economically devastated Venezuela's request for a $5 billion loan to help it cope with the onslaught of coronavirus on the country that an aid agency warned is as prepared as war-torn Syria.

President Nicolas Maduro made the request earlier Tuesday but, in a statement hours later, the Washington-based institution indirectly cited a dispute over Maduro's leadership in denying his petition.

In a letter to IMF chief Kristalina Georgieva, Maduro said a $5 billion loan from the IMF's Rapid Financing Instrument (RFI) "will contribute significantly to strengthening our detection and response systems."

It was the country's first loan request to the IMF since 2001.

"Unfortunately, the Fund is not in a position to consider this request," because there is "no clarity" on international recognition of the country's government, the Washington-based institution said in a statement.

"As we have mentioned before, IMF engagement with member countries is predicated on official government recognition by the international community, as reflected in the IMF's membership. There is no clarity on recognition at this time," the statement said.

More than 50 countries including the United States have not recognised Maduro for more than a year, after switching allegiance to opposition leader Juan Guaido who declared himself acting president.

Guaido branded Maduro a usurper over the president's 2018 re-election in polls widely seen as fraudulent.

But US sanctions and other international pressures have failed to dislodge Maduro, who is backed by Venezuela's creditors China and Russia and retains the support of the powerful military.

 Five years of crisis

The RFI from which Maduro sought the assistance is a mechanism by which all IMF member countries can get financial assistance without the need to have a full-fledged economic program in place.

Venezuela's health system is in tatters after five years of economic and political crisis that has sent millions of people fleeing for lack of basic staples.

"We hardly have five per cent of the medicine stocks we need," Douglas Leon Natera, head of the Venezuelan Medical Federation, told AFP earlier.

Jan Egeland, general secretary of the Norwegian Refugee Council, placed Venezuela in the same category as war-torn Syria and Yemen in its preparedness.

Like those countries, "there will be carnage" when the virus reaches parts of Venezuela given that "health systems have collapsed," warned Egeland.

The country has 33 reported coronavirus cases, according to John Hopkins' global tally, and Maduro has ordered a lockdown in the capital Caracas and six other states.

"At this crucial moment and aware of the high level of contagion of this disease, we will continue to take rapid and vigorous measures" to stop the advance of the pandemic, Maduro wrote in his letter to Georgieva.

"We are convinced that in permanent coordination with the WHO (World Health Organisation) and the support among the countries of the world, we will be able to overcome this difficult situation."

Security forces on motorcycles and in vehicles are patrolling the streets of the capital to enforce the containment measures and ensure only food stores remain open.

The country has banned flights to and from Europe, as well as Colombia, Panama and the Dominican Republic. It has also suspended school and university classes as well as sports events.

FRANKFURT AM MAIN - German auto giant Volkswagen said on Tuesday it was preparing to shutter most of its European plants.

Production will be halted in Spain, Portugal and Slovakia and Italy before the end of this week," CEO Herbert Diess said in a speech.

The company is joining a slew of other carmakers as the coronavirus pandemic disrupts supply chains and sends demand plummeting.

"Most of the other German and European plants will begin preparing to suspend production, probably for two to three weeks," he added.

The move comes as European governments take ever more drastic measures to keep people at home, and factory closures around the world interrupt deliveries of parts needed to keep car production going.

Volkswagen's powerful works council, which represents employees at the group, said separately that VW's closures would broadly take effect from Friday -- and slammed bosses for not taking more urgent action.

"We believe this is too late! We expect an orderly exit from production now," Germany's works council chiefs said in an open letter.

VW staffers who have to work closely together on assembly lines don't understand why they should "risk infection" for "a few hundred more cars" when executives were already working from home, they wrote.

Car manufacturing factories are being idled across Europe.

Italian-American automaker Fiat Chrysler has halted production at six plants in Italy and one each in Serbia and Poland until March 27.

France's PSA Group, whose brands include Peugeot, Citroen and Opel, has said it too will shutter its European production sites starting this week.

Its French rival Renault said it was suspending production at its four factories in Spain.

 'Very difficult

Diess said the VW group faced a "very difficult" year as the coronavirus epidemic wreaks havoc with the global economy.

In a press release announcing the company's 2019 results, he said the coronavirus outbreak posed "unknown operational and financial challenges".

The group, whose stable of 12 brands includes Porsche, Audi, Seat and Skoda, declined to unveil an outlook for 2020.

Volkswagen said the volatile situation and the unprecedented shocks to supply and demand made it "almost impossible" to make a reliable forecast.

Volkswagen's finance chief Frank Witter said it was "uncertain how severely or for how long" the pandemic upheaval will affect the company.

But he said the group would make "full use of all measures" available "to support our employees and their families and to stabilise our business."

In a rare spot of bright news, VW said it had resumed operations in China, with the exception of its factories in Changsha and Urumqi, as the country appears to have turned a corner in the virus fightback.

Looking at its 2019 results, the group said it saw revenues climb 7.1 per cent to 252.6 billion euros ($282 billion).

It achieved a net profit attributable to shareholders of 13.3 billion euros, up 12.8 per cent on 2018, driven by strong sales of more expensive models.

SINGAPORE - Oil rebounded on Tuesday, with investors buying at bargain levels after prices plunged to four-year lows as governments worldwide ramped up measures to contain the spread of the deadly coronavirus.

Analysts said, however, that any recovery in oil prices is likely to be shortlived as travel restrictions and other tough measures rolled out to fight the virus sap demand amid a production glut and price war.

US benchmark West Texas Intermediate (WTI) was trading at $29.95 a barrel, up 4.36 per cent, in afternoon Asian trade.

International benchmark Brent was up 2.43 per cent to $30.78 after crashing more than 10 per cent overnight to below $30 a barrel for the first time in four years.

"Presumably, the market is getting supported by physical bargain hunters, but those storage facilities are rapidly filling," said AxiCorp global chief market strategist Stephen Innes.

But "if storage does fill, quashing that demand, oil prices are sure to collapse further", he said in a note.

"The global markets will then have to hope that the dispute between Saudi Arabia and Russia is resolved before we reach that point of no return."

Last week's price war began after Saudi Arabia pushed an informal alliance of major crude producers to slash output to combat the impact of the virus outbreak on prices.

But alliance partner and non-OPEC member Russia, the world's second-biggest oil producer, refused -- prompting Riyadh to drive through massive price cuts and pledge to boost production.

IHS Markit said rising production and slumping demand could result in the "most extreme global oil supply surplus ever recorded".

It estimated that if the price war continues amid a global recession and the coronavirus pandemic, the surplus could range between 800 million and 1.3 billion barrels in the first six months of 2020.

This would dwarf the previous six-month global surplus of 360 million barrels from late 2015 to early 2016, it said in a market analysis.

As well as restricting travel, many governments worldwide have shut down schools, large gatherings and non-essential business in a bid to contain the spread of the virus.

DUBAI — Gulf stock markets tumbled in tandem with oil prices on Monday. 

Oil prices, the main source of Gulf revenues, skidded to a four-year low amid demand worries and a price war between Russia and Saudi Arabia, the second and third top world producers.

Gulf stocks slumped despite a slew of interest rate cuts announced by central banks in the region, on the heels of stimulus packages unveiled by Saudi Arabia, the UAE and Qatar worth tens of billions of dollars.

Abu Dhabi dived by 7.8 per cent and Dubai by 6.2 per cent, both hitting multiyear lows, despite a $27.2 billion stimulus package recently announced by the UAE central bank.

Boursa Kuwait continued to bleed with the Premier Index sliding 5 per cent.

The Saudi Tadawul market, the region’s biggest, dropped 5.2 per cent despite a $13.3 billion stimulus announced by the kingdom to support the economy.

Shares in Saudi energy giant Aramco dropped 3.1 per cent, a day after it reported a 20.6 per cent fall in net profit in 2019.

The Bahrain bourse slipped 1.4 per cent and the Muscat market ended 1.8 per cent down.

Qatar Stock Exchange bucked the trend for the second day after the gas-rich emirate announced a $23 billion stimulus that includes $2.7 billion to support the stock market.

Four of the six Gulf countries followed the US Federal Reserve by making deep cuts to their main interest rates to stimulate the economy.

Saudi Arabia cut its Repo rate, its main interest rate, by 0.75 percentage points to 1.75 per cent.

Qatar cut its lending rate by 100 basis points to 2.5 per cent and Bahrain also reduced its main interest rate from 1.75 per cent to 1 per cent.

Kuwait Central Bank cut its main discount rate by 100 basis points to 1.5 per cent, its lowest ever.

Oil prices extended losses on Monday with US benchmark West Texas Intermediate (WTI) slumping below $30 a barrel, down 5.7 per cent.

Benchmark Brent North Sea crude was down 9.6 per cent at $30.60 a barrel.

DUBAI — Gulf shares dropped on Sunday amid unprecedented shutdowns to ward off the spread of coronavirus, despite tens of billions of dollars in stimulus packages announced by oil-rich governments.

The Saudi Tadawul market, the region’s largest, dropped 1.1 per cent despite the kingdom announcing a $13.3 billion stimulus package to help its economy cope with the effects of the virus and a low oil price.

The market was also impacted by a 20.6 per cent dive in 2019 net profit of energy giant Saudi Aramco.

UAE’s bourses in Dubai and Abu Dhabi ignored a $27.2 billion stimulus package announced by the central bank, mainly directed at banks which were asked to delay debt payments of customers for up to six months. 

Dubai shares dipped 3.4 per cent, sliding below the 2,000-point mark for the first time since 2013, and the Abu Dhabi stock market ended the day down 1.9 per cent.

Boursa Kuwait was the biggest loser with the Premier Index sliding 6.5 per cent and the All-Shares Index shedding 5.5 per cent as the country announced stringent virus containment measures.

Kuwaiti authorities ordered the closure of shopping malls, beauty salons and barber shops, days after halting commercial flights, banning the entry of foreigners and giving employees a two-week public leave.

Saudi Arabia also halted all commercial flights while UAE closed all entertainment facilities, stopped new visas to foreigners, banned flights to several countries and asked elderly employees to work from home.

Bahrain Boursa was down 1.5 per cent while the markets of Qatar and Oman bucked the trend, rising 1 per cent and 0.4 per cent respectively.

Last week, the seven bourses slumped to multi-year lows as the coronavirus hit the oil market hard and oil producers waged a price war that sent prices crashing.

The six countries — Bahrain, Kuwait, Oman, Qatar, Saudi Arabia and UAE — have reported over 800 cases of coronavirus, most of them returnees from Iran, but no deaths so far.