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Second wave of COVID-19 poses risk to economic recovery; Q4 GDP to be hit: Report

April 17, 2021 by auto.economictimes.indiatimes.com Leave a Comment

economic recovery , and the GDP is unlikely to achieve the earlier projected 3 per cent growth for March quarter 2020-21, Wall Street brokerage Bank of America (BofA) Securities said on Friday.

Noting that a month-long nationwide lockdown can shave off 100-200 basis points off the GDP, the brokerage said growth is still weak, amplified by the steep fall in key economic activity indicators and the anaemic loan growth, and the surging pandemic cases is only increasing the worries on the growth front.

However, the report by BofA Securities did not offer a likely GDP number for the March quarter 2020-21.

The seven-component BofA India activity indicator slowed to 1 per cent in February from 1.3 per cent in January, the report said, as 4 of the 7 constituents of the India activity index slowed in February over the previous month.

The report also pointed out that this poses risks to their 3 per cent real GVA growth forecast for the March quarter. The index had first time in 2020-21 turned positive in December 2020 after declining for nine straight months.

Spike in pandemic cases poses a rising risk to recovery. “We estimate that a month of national lockdown costs 100-200 bps of GDP,” the report warned.

The pandemic caseload in India has been surging hitting new records everyday for the past fortnight. The latest official number puts the daily infections at 2.17 lakh in the past 24 hours and 1,185 deaths– both are the highest in the world and more than the combined numbers of the second and the third most affected countries– Brazil and the US.

The report said it remains to be seen if the second wave subsides without a national lockdown and noted that Maharashtra, which contributes over 16 per cent of national GDP is already under lockdown till the end of the month as the state has more than half of the new cases.

A bit of good news is that real lending rates are falling thanks to the steady RBI easing and normalization of core WPI and these factors should push 2021-22 loan growth to 12 per cent from 5.6 per cent in the last fiscal year. Real interest rates are a proxy for pricing power.

Falling real lending rates will push up loan growth. Despite some spike in inflation, the nominal marginal cost of funds based lending rate ( MCLR ) is now down 145 basis points since March 2019 and the real MCLR is lower by 506 basis points since then. And so are the nominal and real weighted average lending rates.

In sum, “an anemic loan growth only buttresses our view of a weak recovery,” the report concluded.

Filed Under: Industry gdp, WPI, pandemic, mclr, GVA, economic recovery, covid, BofA Securities, brain drain hampers greek economic recovery, q4 gdp, q4 gdp release date, q4 gdp growth, q4 gdp 2018, q4 gdp india, q4 gdp us, q4 gdp growth 2018, q4 gdp growth us, q4-86 research report pdf

7-Eleven operator sustains 2020 loss of P419.7M

April 17, 2021 by business.inquirer.net Leave a Comment

Leading convenience store operator Philippine Seven Corp. (PSC) returned to profitability in the fourth quarter of 2020 as sales gradually improved alongside the reopening of the economy amid the prolonged COVID-19 pandemic.

“We are not out of the woods, by any stretch. Our financial performance has been abysmal, and when our profit and growth numbers will return depends on not just the pandemic and how the Philippines navigates its end, but on how quickly our online and offline pivots take root, if at all,” Jose Victor Paterno, PSC president and chief executive officer, said in a disclosure to the Philippine Stock Exchange on Friday. Due to losses incurred in the second and third quarters of 2020, the Philippine licensee of 7-Eleven stores ended with a full-year net loss of P419.7 million, a reversal of the P1.44 billion in net profit posted the previous year. For the fourth quarter alone, net profit amounted to P165.6 million, down by 77.9 percent year-on-year. However, this marked a turnaround from the losses in the past two quarters. Proactive pivot

“In times like these, we believe it is better to look not at numbers and forecasts, but instead at one’s position relative to others caught in the same fierce—and unpredictable—storm. In that regard, we take pride and confidence in a proactive pivot executed at speed, helped as it was by prework before the pandemic, relative to that of our more optimistic peers,” Paterno said. Same-store sales in the fourth quarter grew by 14.3 percent compared with sales of the preceding quarter. Full-year same store sales dropped by 18.4 percent as the restricted movement of individuals and hampered commercial activities. The sales of 7-Eleven stores in the office and school clusters were the most affected. On a system-wide basis, however, the company said it was able to generate strong level of cash flow to enable it to support its product and market development plans moving forward.

While the past 12 months had been unprecedented, Paterno said PSC had big ambitions and sheer determination to remake the company in the face of adversity.

PSC ended 2020 with a nationwide store count of 2,978 stores. There are 2,261 7-Eleven stores in Luzon, 1,010 of which are in Metro Manila, 432 in Visayas and 285 in Mindanao.

—Doris Dumlao-Abadilla INQ

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Obstacles at Bay, Beijing Steps up Control Over Disputed South China Sea

June 19, 2017 by www.voanews.com Leave a Comment

TAIPEI – Beijing has reached a new peak in its bid to control the widely disputed South China Sea after pacifying rivals, keeping Washington away and building out artificial islands that are ready for military hardware.

China will be able to keep three fighter-jet regiments on the same number of islets that it has constructed in the sea, according to a June 6 Pentagon report. China’s estimated 3,200 acres (1,294 hectares) of reclaimed land in the 3.5 million-square-kilometer sea will be used largely for military installations, a think tank forecast in March.

Joint military exercises with Russia

In another sign of tighter maritime control, Beijing’s official Xinhua News Agency said Sunday that a Chinese destroyer, frigate, supply ship and helicopter had joined Russian vessels for phase one of “complex” and “lengthy” joint military exercises that are starting in the South China Sea. Russia has the world’s second most powerful armed forces and China the third.

“I think there is an unspoken understanding that there’s no way China can be stopped,” said Collin Koh, maritime security research fellow at Nanyang Technological University in Singapore. “I think it’s a fact that China is the dominant player there other than the U.S.”

“Nine-dash line” control

China’s rise in the sea, which is claimed by five other governments, follows a year of unfettered diplomacy with those countries and a decade of landfilling some of the sea’s 500 tiny land forms to support infrastructure construction.

China will eventually decide what happens within its “nine-dash line” claim that covers more than 90 percent of the sea, said Gregory Poling, director of the Asia Maritime Transparency Initiative of American think tank Center for Strategic and International Studies. Beijing cites historic usage as a basis for the claim.

Brunei, Malaysia, Taiwan, Vietnam and the Philippines all call parts of the sea their own, overlapping the nine-dash line. They all value the sea for its fisheries, fossil fuel reserves and marine shipping lanes.

Total Chinese control

“I think the goal here is to extend a Chinese umbrella over the entire nine-dash line, which means effectively establishing administration over all of this area that China claims, including all these waters and air space they claim historic rights over,” Poling said.

“So that means if you’re a Southeast Asian fishermen or coast guard vessel or an oil and gas exploration vessel, you don’t operate unless the Chinese let you operate,” he said.

Chinese diplomacy

The Communist leadership stepped up one-on-one dialogue with the  militarily weaker Southeast Asian countries after a world arbitration court ruled in July against the legal basis for the Chinese claim. Beijing offers aid in exchange for muting any protest against China’s maritime military expansion, analysts say.

China offered the Philippines $24 billion in aid and investment last year. It has pumped Vietnam’s service sector with tourists while discussing maritime cooperation. Malaysia counts China as its top investor and trading partner.

US stepping back from South China Sea

Southeast Asian countries such as Vietnam and the Philippines once looked to the United States for resistance against China. Now U.S. President Donald Trump wants China’s help on stopping North Korea’s missile and nuclear programs.

“There seems to be no intention within the U.S. government in trying to craft up some form of a South China Sea strategy,” Koh said.

Southeast Asian nations aren’t pushing for one either, said Sean King, senior vice president of New York political consultancy Park Strategies.

“There’s been no coordination among the non-Chinese claimants and the only one among them that remotely has its act together on this issue, Vietnam, surely felt abandoned after America ditched the TPP, thus questioning how truly committed we are to the region,” King said.

Trump exited the TPP, or Trans Pacific Partnership, in January, calling the 12-member trade deal bad for the United States.

Signs that US will show more interest

But U.S. officials have hinted this month they will eventually take a harder line on China’s maritime expansion.

In May, the U.S. Navy sent a ship on a “freedom of navigation” operation in the South China Sea despite Beijing’s objections.

“China’s claim in the South China Sea needs to be handled peacefully and through negotiations, not by island-building and placing weaponry on the resulting dry land,” Defense Secretary Jim Mattis told an Asian defense conference earlier this month as quoted by the U.S. Department of Defense website.

Southeast Asian maritime claimants are keeping options open to ask Japan, India and other countries for help as needed in keeping China away, Koh said.

But today’s “cautious” Sino-U.S. cooperation, plus the specter of a more aggressive U.S. military role in the sea, should stop China from getting aggressive toward other claimants, said Andrew Yang, secretary-general with the Chinese Council of Advanced Policy Studies think tank in Taiwan.

Filed Under: Uncategorized China, south china sea, East Asia Pacific, asean on south china sea dispute, islands disputed in south china sea, disputed waters in south china sea, beijing criticizes indonesia renaming part of south china sea, asean china south china sea dispute, beijing bolsters its islands in the south china sea, china philippines dispute south china sea, china-philippines dispute over south china sea, india china south china sea dispute, indonesia china south china sea dispute

Light showers likely to cool Delhi temperature

April 17, 2021 by www.oneindia.com Leave a Comment

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oi-Vicky Nanjappa
By Oneindia Correspondent

| Published: Saturday, April 17, 2021, 14:14 [IST]

New Delhi, Apr 17: It was a partly cloudy sky on Saturday morning in Delhi with the minimum temperature settling four notches below the normal at 18.2 degrees Celsius, the India Meteorological Department (IMD) said.

After Friday’s light rain and dust storm, the city is expected to witness the maximum temperature of about 36 degrees Celsius.

<strong>Weather forecast: Warm Thursday morning in Delhi hot day ahea</strong>d Weather forecast: Warm Thursday morning in Delhi hot day ahea d

The city received 2.4mm rainfall in the last 24 hours.

While the sky will remain partly cloudy, light rain or drizzle can be expected during the day, an IMD official said.

Relative humidity was recorded at 74 per cent at 8.30 am.

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