(Bloomberg) -- Japan confirmed that two people from a quarantined cruise ship died, while coronavirus cases in South Korea more than doubled in one day, with a surge of infections tied to a church.
Financial markets came under pressure on signs the outbreak was spreading more rapidly beyond China. The global death toll was at 2,128, with 10 fatalities outside of mainland China. Hubei province reported a sharp drop in new cases after China again changed the way it diagnoses infections, raising questions over the reliability of the data.
China’s banks lowered the benchmark borrowing costs for loans as Beijing seeks to blunt the economic impact of the outbreak. China is planning to take over HNA Group Co. and sell off its airline assets after the coronavirus outbreak hit the debt-laden conglomerate’s ability to meet financial obligations, according to people familiar with the plans.
Key Developments
- China death toll rises to 2,118, with cases at 74,576
- Hubei adds 108 deaths, new cases increase by 349; 1,209 more patients discharged
- U.S. stock futures erase gain on report of Japan deaths
Air France-KLM Warns of Profit Hit From Virus (2:23 p.m. HK)
Air France-KLM said China’s coronavirus outbreak will wipe as much as 200 million euros ($216 million) from earnings, hammering home the financial impact of the crisis even thousands of miles from its epicenter.
The estimate includes losses from halting flights to the Asian nation this month and next, and assumes that services will resume in April, the Paris-based company said. An extended delay would escalate costs still further.
Japan Confirms Two From Cruise Died From Virus (2:14 p.m. HK)
Japan confirmed two people who were on the cruise ship off Yokohama died from the novel coronavirus.
The fatalities were a man and woman, both Japanese nationals in their 80s, who had existing medical conditions, NHK reported.
The cruise ship has the most infections anywhere outside China, with more than 600 confirmed cases. Following 14 days of quarantine, Japan on Wednesday allowed passengers to start disembarking from the Diamond Princess liner, despite worries the country hasn’t done enough to prevent the spread of disease from the vessel.
China Premier Says Don’t Halt Grain Planting (2:10 p.m. HK)
Chinese Premier Li Keqiang told local governments to make sure farmers don’t miss the key grain planting season during this critical time of controlling the spread of the coronavirus. If planting season is missed, it may have an impact on the economic foundation and social stability for the whole year, according to a release posted on the government website.
Planting in some southern areas should start at the end of February, while large-scale planting begins in March.
Japan Machinery Orders Rebound Delayed: Lobby (2 p.m. HK)
The Japan Machine Tool Builders’ Association said a rebound in machinery orders it has previously forecast for the April-June quarter is likely to be delayed by three months as demand in China is hit by the coronavirus outbreak.
The lobby group had previously forecast the slump in orders to bottom out in the current quarter, but now expects the declines to continue beyond March, JMTBA Chairman Yukio Iimura said at a briefing in Tokyo on Thursday. “We can’t travel to China to get orders and our customers there can’t come here either,” Iimura said.
Fecal Transmission May Be Behind Virus’s Rapid Spread (12:37 p.m. HK)
The novel coronavirus is shed in the feces of infected people, which may help explain why it’s spread so fast, according to Chinese researchers.
The finding of live virus particles in stool specimens indicates a fecal-oral route for coronavirus, which may be why it’s caused outbreaks on cruise ships with an intensity often seen with gastro-causing norovirus, which also spreads along that pathway. More than 600 Covid-19 infections were confirmed among passengers and crew aboard the Diamond Princess, the ship quarantined for two weeks in Yokohama, Japan.
“This virus has many routes of transmission, which can partially explain” its rapid spread, the Chinese Center for Disease Control and Prevention said in a report Saturday.
The agency recommends strengthening sanitation and hygiene measures to prevent fecal-oral transmission in epidemic area. These include drinking boiled water, avoiding eating raw food, implementing separate meal systems, frequent hand-washing, disinfecting toilets, and preventing water and food contamination from patients’ stool.
“The virus can also be transmitted through the potential fecal-oral route,” the Chinese CDC said. “This means that stool samples may contaminate hands, food, water” and cause infection when the microbes enter the mouth or eyes, or are inhaled, they said.
Hong Kong Extends Work-From-Home for Civil Servants (12:23 p.m. HK)
Hong Kong will extend work-from-home arrangements for civil servants to March 1 to reduce social contacts and the risk of spread of novel coronavirus in the community, according to an official statement. The government previously announced it would extend the work-from-home arrangement for civil servants to Feb. 23.
U.S. Condemns China’s Expulsion of WSJ Reporters (11:04 a.m. HK)
U.S. Secretary of State Mike Pompeo criticized China’s move to revoke the press credentials of three Wall Street Journal reporters over a controversial headline, a decision that comes as Beijing continues to lash out at countries that fault its handling of the deadly coronavirus outbreak.
“The United States condemns China’s expulsion of three Wall Street Journal foreign correspondents,” Pompeo said in a statement late Wednesday. “Mature, responsible countries understand that a free press reports facts and expresses opinions,” he said. “The correct response is to present counter arguments, not restrict speech.”
China made the rare move of punishing multiple journalists at a single news organization after it said the Journal refused to apologize for a “racially discriminatory” op-ed, Foreign Ministry spokesman Geng Shuang said Wednesday. Foreign journalists need press passes issued by the foreign ministry to qualify for visas to report in the country.
China Loan Rate Drops After Central Bank Eases Policy (9:48 a.m. HK)
China’s banks lowered the benchmark borrowing costs for new corporate and household loans after Beijing slashed a range of policy rates this month to blunt the economic impact of a deadly virus outbreak.
The one-year loan prime rate was lowered to 4.05% from 4.15%, according to a statement from the central bank. The five-year tenor was set at 4.75%, down from 4.8%. Earlier this month, the central bank cut the rates on its short-term funds and one-year loans to commercial lenders.
China’s economic growth is coming under pressure as the virus outbreak shuts down much of the economy. The health crisis has prompted investment banks to lower their forecasts for the nation’s gross domestic product.
South Korea Posts Surge in Cases Tied to Church (9:41 a.m. HK)
Confirmed coronavirus cases in South Korea have more than doubled within a day, to 82, with a surge tied to a church whose members may have contracted the virus from a single person.
South Korea’s Centers for Disease Control and Prevention said in a statement that of the 31 new confirmed cases, 24 attended the “same Korean cult” with at least five of them having an “epidemiological link“ to a patient confirmed with the coronavirus earlier this week.
The Temple of the Tabernacle of the Testimony, formerly known as Shincheonji Church of Jesus, said in a statement on its website that the patient identified as No. 31 by KCDC attended a worship service in one of its churches in Daegu. The pastor told local media that some 1,000 people attended the same service.
The outbreak in Daegu, a city about 235 kilometers (150 miles) south of Seoul, has raised renewed concerns about the virus in South Korea after a lull in reported cases last week.
Hubei Adds Fewer New Cases (7:50 a.m. HK)
China’s Hubei province reported 349 additional confirmed cases for Feb. 19, a sharp drop from almost 1,700 the previous day.
No explanation was given for the decline, although it came a day after national guidelines advised the province to only report two numbers in its overall count: confirmed cases and suspected cases. Prior to that, the province reported whether cases were confirmed via CT scans, or testing kits.
China has faced questions about the transparency of its data as it repeatedly adjusts how it reports coronavirus cases. Last week, a shift in methods resulted in a surge of almost 15,000 new Hubei cases.
The number of discharged patients in Hubei rose by 1,209 for Feb. 19, topping the number of new infections for the first time. Hubei’s numbers for additional cases have been falling for the past week, while those for discharged patients have been rising.
Qantas Slashes Capacity, Freezes Hiring (7:15 a.m. HK)
Qantas Airways Ltd. is slashing capacity on international flights in Asia by 15% and freezing recruitment as the coronavirus drives down travel demand. The reductions apply to flights to mainland China, Hong Kong and Singapore and will be in place until at least the end of May, the Australian airline said.
The cuts are the equivalent of grounding 18 planes across Qantas and its low-cost division Jetstar, the company said. Qantas forecast the coronavirus will reduce profit by as much as A$150 million ($100 million) in the year ending June.
CDC Warns Travelers (NYSE:TRV) to Hong Kong (4:20 p.m. NY)
The U.S. Centers for Disease Control and Prevention warned travelers to Hong Kong to be prepared for the novel coronavirus after a second person there died from the infection.
The agency put in place a level 1 travel notice for Hong Kong that advises visitors to avoid contact with sick people and to wash their hands often to avoid contracting the virus, which is spreading there from person-to-person.
The CDC has level 4 advisory for China’s Hubei province, the center of the outbreak, which means no one should travel there. The rest of mainland China is level 3, meaning people should avoid non-essential travel.
Two Iran Patients Die: Report (11:37 a.m. NY)
Two Iranian citizens who tested positive for the coronavirus have died, a Health Ministry official told the state-run Islamic Republic News Agency, the country’s first fatalities from the outbreak.
The patients were elderly residents of the the city of Qom, said the news agency, about 100 miles (150 kilometers) south of Tehran.
China Said to Near Takeover of HNA Group (9:45 a.m. NY)
China is planning to take over HNA Group Co. and sell off its airline assets after the coronavirus outbreak hit the indebted conglomerate’s ability to meet financial obligations, according to people familiar with the plans.
The government of Hainan, the southern island province where HNA is based, is in talks to take control of the conglomerate, which has been shedding assets after a global buying spree left it with one of the highest levels of corporate debt in China, the people said. The airline assets could be taken over later by other local companies, they said.
China’s Central Bank Expects ‘Limited’ Virus Impact (8:41 a.m. NY)
The People’s Bank of China acknowledged the downward pressure facing the economy and said the impact of the outbreak would be “short-lived” and “limited in terms of time and scope.”
It called for a “rational view” on the economic impact of the virus and said it’ll work to promote consumption and investment to boost domestic demand, according to a quarterly monetary policy report.
IMF Sees Global Economic Rebound Despite Virus Threat (8:30 a.m. NY)
Worldwide economic growth is expected to “moderately strengthen” this year, according to the IMF, despite the Washington-based lender warning that the coronavirus is one of the main risks that could derail that outlook.