Kuala Lumpur, Malaysia – New figures showing Chinese manufacturers came roaring back to life in March following two months of coronavirus lockdowns gave Asian stocks a modest boost on Tuesday.
European stocks were also up in early trade, while oil prices rose.
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The latest survey of China’s factory activity, the so-called Purchasing Managers Index (PMI) conducted by the National Bureau of Statistics, indicated that companies in the manufacturing sector are expanding again, after a deep contraction in February.
The recovery may be an early signal that the worst is over for the world’s second-largest economy, where the pandemic began, but the road to a full recovery remains long and arduous, analysts said.
In Japan, data released on Tuesday showed both factory output and retail sales rose in February, though the pandemic may still lead to weaker numbers in the months ahead.
“The data itself was pleasing in that it was broad-based and implies that the first countries into COVID-19, are perhaps on their way out of it,” Jeffrey Halley, senior market analyst for Asia Pacific at OANDA, told Al Jazeera. “That won’t alleviate the demand shock coming from elsewhere in the world, and any recovery will be fragile indeed, but the potential light at the end of the tunnel gave Asian investors some welcome cheer today,”
China’s benchmark Shanghai Composite share index ended the day little changed with a 0.11 percent gain, while Japan’s Nikkei 225 index lost 0.88 percent. Both markets erased early gains after the release of their respective economic figures.
Over the first quarter of 2020, the Nikkei has lost more than 18 percent of its value.
Hong Kong’s Hang Seng Index gained 1.85 percent, South Korea’s Kospi Index rose 2.19 percent, and Singapore’s Straits Times Index increased 1.99 percent.
Accelerated government efforts in South Korea and Japan to fight the pandemic and its economic fallout also buoyed investor optimism.
Japan’s government on Monday proposed a record stimulus spending package worth 100 trillion yen ($926bn) – the equivalent of up to 17 percent of the size of the Japanese economy – to insulate the country’s people from the worst of the effects of the coronavirus.
Meanwhile, South Korean President Moon Jae-in the country is planning a second round of emergency spending that will include direct payments to low-income families to help cushion the blow of the containment measures.
Chinese factories rebound
China’s PMI jumped to 52.0 in March, from 35.7 in February, according to data released by the National Bureau of Statistics.
The non-manufacturing PMI also rose to 52.3 from 29.6, bolstered by a recovery in the services and construction sectors.
A figure above 50 indicates businesses are expanding, while anything below that means activity is shrinking.
“The latest survey data add to a broader evidence that activity has started to rebound but suggest that weak foreign demand and labour market strains remain headwinds,” Julian Evans-Pritchard, senior China economist at Capital Economics, wrote in a note.
“A full recovery will take much longer given the deepening slump in foreign demand and the deterioration in the labour market – the employment components of the PMIs rose last month but still point to continued layoffs.”
Shares in Europe were mostly higher in early trade, with the main indices in Paris, London and Frankfurt up between 2.2 and 2.5 percent.
Meanwhile, oil prices rebounded after Brent crude nosedived to the lowest levels in 18 years on Monday amid a double whammy of a supply glut caused by a price war between top producers Saudi Arabia and Russia, and a collapse in demand as the world comes to a near standstill.
After calling the price war “crazy,” US President Donald Trump agreed with Russian President Vladimir Putin during a phone call on Monday to let their top energy officials meet to discuss the crash in oil markets. The plunge in crude prices has hurt US shale oil and gas producers because of their higher operating costs.
Brent crude futures clawed back some losses on Tuesday, rising 0.7 percent to $27.12 per barrel. US West Texas Intermediate jumped 5.43 percent to $21.16 per barrel.
Even with Tuesday’s gains, global crude prices have fallen by about 66 percent so far this year.
Virus still spreading
The coronavirus pandemic continues to take its toll on the global economy since the first cases were reported in China at the end of 2019. The virus has infected more than 784,000 worldwide, killing about 37,500 people, while some 165,000 have recovered.
The epicentre of the outbreak has shifted from China to the US, where the number of new cases has jumped to 163,500, the most in the world.
With large areas of the US under lockdown, Trump has abandoned plans to reopen parts of the economy by mid-April while Congress started to ready a fourth round of stimulus spending plans to shore up the economy and protect its people from the deepening fallout.
“Due to the severe global travel bans and lockdowns in place in many countries around the world, the global economy is expected to experience the worst recession since the Global Financial Crisis in 2020,” Rajiv Biswas, Asia Pacific chief economist at IHS Markit, told Al Jazeera.
The US, UK, Europe and Japan are expected to experience deep recessions in 2020, he said.
“However, there is some brighter news as China’s economy is showing signs of a gradual rebound in momentum in March as new COVID cases have fallen to extremely low levels, after the severe disruption of production and business activity during February,” Biswas said.
Future PMI surveys in coming months will help show the strength of China’s economic rebound, while PMI readings for other Asian countries will provide a guide to the extent of the economic shocks from the pandemic across the Asia Pacific region, he said.
TORONTO – Roots Corp. may have built its brand on all things comfy and cosy, but its CEO says activewear is now “really becoming a core part” of the brand.
The category, which at Roots spans leggings, tracksuits, sports bras and bike shorts, has seen such sustained double-digit growth that Meghan Roach plans to make it a key part of the business’ future.
“It’s an area … you will see us continue to expand upon,” she told analysts on a Friday call.
The Toronto-based retailer’s push into activewear has taken shape over many years and included several turns as the official designer and supplier of Team Canada’s Olympic uniform.
But consumers have had plenty of choice when it comes to workout gear and other apparel suited to their sporting needs. On top of the slew of athletic brands like Nike and Adidas, shoppers have also gravitated toward Lululemon Athletica Inc., Alo and Vuori, ramping up competition in the activewear category.
Roach feels Roots’ toehold in the category stems from the fit, feel and following its merchandise has cultivated.
“Our product really resonates with (shoppers) because you can wear it through multiple different use cases and occasions,” she said.
“We’ve been seeing customers come back again and again for some of these core products in our activewear collection.”
Her remarks came the same day as Roots revealed it lost $5.2 million in its latest quarter compared with a loss of $5.3 million in the same quarter last year.
The company said the second-quarter loss amounted to 13 cents per diluted share for the quarter ended Aug. 3, the same as a year earlier.
In presenting the results, Roach reminded analysts that the first half of the year is usually “seasonally small,” representing just 30 per cent of the company’s annual sales.
Sales for the second quarter totalled $47.7 million, down from $49.4 million in the same quarter last year.
The move lower came as direct-to-consumer sales amounted to $36.4 million, down from $37.1 million a year earlier, as comparable sales edged down 0.2 per cent.
The numbers reflect the fact that Roots continued to grapple with inventory challenges in the company’s Cooper fleece line that first cropped up in its previous quarter.
Roots recently began to use artificial intelligence to assist with daily inventory replenishments and said more tools helping with allocation will go live in the next quarter.
Beyond that time period, the company intends to keep exploring AI and renovate more of its stores.
It will also re-evaluate its design ranks.
Roots announced Friday that chief product officer Karuna Scheinfeld has stepped down.
Rather than fill the role, the company plans to hire senior level design talent with international experience in the outdoor and activewear sectors who will take on tasks previously done by the chief product officer.
This report by The Canadian Press was first published Sept. 13, 2024.
VANCOUVER – Mediated talks between the union representing HandyDART workers in Metro Vancouver and its employer, Transdev, are set to resume today as a strike that has stopped most services drags into a second week.
No timeline has been set for the length of the negotiations, but Joe McCann, president of the Amalgamated Transit Union Local 1724, says they are willing to stay there as long as it takes, even if talks drag on all night.
About 600 employees of the door-to-door transit service for people unable to navigate the conventional transit system have been on strike since last Tuesday, pausing service for all but essential medical trips.
Hundreds of drivers rallied outside TransLink’s head office earlier this week, calling for the transportation provider to intervene in the dispute with Transdev, which was contracted to oversee HandyDART service.
Transdev said earlier this week that it will provide a reply to the union’s latest proposal on Thursday.
A statement from the company said it “strongly believes” that their employees deserve fair wages, and that a fair contract “must balance the needs of their employees, clients and taxpayers.”
This report by The Canadian Press was first published Sept. 12, 2024.
MONTREAL – Travel company Transat AT Inc. reported a loss in its latest quarter compared with a profit a year earlier as its revenue edged lower.
The parent company of Air Transat says it lost $39.9 million or $1.03 per diluted share in its quarter ended July 31.
The result compared with a profit of $57.3 million or $1.49 per diluted share a year earlier.
Revenue in what was the company’s third quarter totalled $736.2 million, down from $746.3 million in the same quarter last year.
On an adjusted basis, Transat says it lost $1.10 per share in its latest quarter compared with an adjusted profit of $1.10 per share a year earlier.
Transat chief executive Annick Guérard says demand for leisure travel remains healthy, as evidenced by higher traffic, but consumers are increasingly price conscious given the current economic uncertainty.
This report by The Canadian Press was first published Sept. 12, 2024.
