US shoppers spent slightly less online during “Black Friday” this year, with many venturing back to physical stores, despite COVID-19 fears, tight supplies and retailers’ efforts to encourage earlier holiday purchases. For the first time, spending online during Black Friday — traditionally one of the biggest shopping days of the year in the US — fell, reversing the growth of the past few years, according to data from Adobe Analytics, a wing of Adobe Inc’s business that specializes in data insights and tracks transactions at 80 of the top 100 US retailers. Retailers lured shoppers to make holiday purchases online as early as September, because supply-chain congestion has prevented them from quickly replenishing year-end merchandise. Shoppers’ total outlay online during Black Friday was about US$8.9 billion, less than last year’s US$9 billion, Adobe said, adding that spending online during Thanksgiving Day was flat at US$5.1 billion. The sluggish two-day performance was a “sign that consumers started to shift their spending to earlier in the season, responding to promotions and deals from retailers that started in October,” Adobe said. Many retailers closed physical stores on Thanksgiving this year, as they did last year, amid a labor shortage and the COVID-19 pandemic. Stores reopened the day after Thanksgiving, and shopper visits was 47.5 percent higher than last year, but 28.3 percent lower than 2019, the last year before the pandemic, data released on Saturday by Sensormatic Solutions showed. Retailers did not gain as much this year because they spread out traffic peaks by starting holiday deals early, Sensormatic global retail consulting senior director Brian Field said. During the holiday season as a whole this year, in-store visits are expected to lag 2019 levels by only 10 to 15 percent, said Sensormatic, a unit of Johnson Controls International PLC. Despite virus concerns, people are prioritizing in-store shopping to avoid shipping delays, Field
HIGH COMPARISON BASE: TIER research fellow Arisa Liu said that this year, the market is still supported by low interest rates in a market awash in liquidity
Home transactions and housing prices could remain unchanged or rise slightly in the first half of next year due to a relatively high comparison base this year, Taiwan Institute of Economic Research (TIER, 台灣經濟研究院) research fellow Arisa Liu (劉佩真) said on Thursday. This year, the property market continues to be supported by historically low interest rates in a market awash in ample liquidity, while many equity investors have chosen to lock in their gains and reallocate money to real estate, Liu said. Many people buy homes to fend off inflationary pressure, Liu said, citing a survey in which 66 percent of respondents preferred to invest in real estate, while 37 percent preferred equity markets. The preference for investing in real estate is expected to continue to shore up the local property market next year, she added. Business sentiment among property developers last month weakened from September, TIER data showed, as few new projects were launched, while the delay of projects by some property developers also made the industry cautious. However, property sales in Taiwan remained strong, Liu said, citing a sequential increase of 11.3 percent in commercial and residential property transactions to 23,810 units in the nation’s six special municipalities last month. Transaction growth was largely due to eased concerns over a domestic outbreak of COVID-19 cases, which prompted many property investors and home buyers to jump into the property market, and helped to keep home prices at relative highs, she said. The central bank is likely to follow the US Federal Reserve in an expected cycle of rate hikes in the middle of next year, although local rates are expected to remain lower than the US Fed’s, while the hikes’ effects are likely to be acceptable to the property market, Liu said.
Mortgages extended by domestic banks last month increased NT$70.25 billion (US$2.52 billion) from September, while construction loans increased by NT$23.95 billion, data released on Thursday by the central bank showed. The monthly increases were higher than September’s increases of NT$60.96 billion in mortgages and NT$19.21 billion in construction loans. It was also the largest monthly growth for mortgages since July, as people resumed buying houses after the easing of a COVID-19 outbreak that started in May. Housing transactions also picked up speed after Ghost Month, which this year took place from Aug. 8 to Sept. 6. The central bank data showed that mortgages and construction loans have increased every month this year, pushing their outstanding balances to historic highs of NT$8.61 trillion and NT$2.73 trillion respectively last month. However, their annual growth has gradually slowed, an indication that the central bank’s selective credit control measures for the market might be working, the Chinese-language Liberty Times (sister paper of the Taipei Times) reported on Friday, quoting central bank officials. Last month, mortgages increased 9.37 percent year-on-year, down 0.01 percentage points from September and the fourth consecutive monthly drop, while construction loans increased 15.25 percent, the smallest expansion since July last year, the data showed. Since March last year, the central bank has implemented several measures to rein in rising housing prices, such as increasing the cost and limiting the source of funds for property buyers through loan-to-value ratio caps, while the central bank and the Financial Supervisory Commission have conducted special inspections of domestic banks to determine whether they are exercising solid risk management on real-estate lending. However, it remains to be seen whether the downward trend in the annual growth of mortgages and construction loans is to continue, as housing sales appear to remain robust and the market is entering its peak season, central bank officials said.
Gasoline prices this week are to fall by NT$0.2 per liter, while diesel prices are to fall by NT$0.3 per liter, CPC Corp, Taiwan (CPC, 台灣中油) and Formosa Petrochemical Corp (台塑石化) said separately yesterday. Effective today, gasoline prices at CPC stations are to fall to NT$29.6, NT$31.1 and NT$33.1 per liter for 92, 95 and 98-octane unleaded gasoline respectively, while the price of premium diesel is to fall to NT$27.7 per liter, the state-run refiner said in a statement. Formosa said that its prices for 92, 95 and 98-octane unleaded gasoline would fall to NT$29.6, NT$31.0 and NT$33.1 per liter respectively, while the price of premium diesel would fall to NT$27.5 per liter. CPC said that global oil prices last week fell from the previous week due to a resurgence of COVID-19 infections in Europe, which led to weaker demand for oil. The Omicron variant of SARS-CoV-2 has also triggered market panic, leading to the restart of travel bans or border controls, it added. The US’ announcement that it would release 50 million barrels of crude oil from its strategic reserves and Washington’s call to Asian countries to release their strategic reserves pushed down international oil prices, Formosa said.
PharmaEssentia Corp (藥華醫藥) shares have jumped 80.56 percent since the company obtained a US polycythemia vera (PV) drug license for its new interferon drug Besremi (ropeginterferon alfa-2b-njft) on Nov. 12. Shares on Friday closed at NT$195 in Taipei trading, up from the stock’s closing price of NT$108 on Nov. 12. PV is a rare, chronic and life-threatening blood cancer linked to a stem cell mutation in the bone marrow that results in an overproduction of blood cells and places sufferers at risk of having a blood clot, stroke or heart attack. PharmaEssentia is preparing to make Besremi available in the US in the coming weeks, which is expected to contribute sales and earnings to the company going forward, Yuanta Securities Investment Consulting Co (元大投顧) said in a note on Thursday. “Besremi is the first first-line PV drug approved by the US Food and Drug Administration (FDA), and can be used on any PV patients regardless of prior treatments,” Yuanta said. “We see a positive outlook for Besremi sales in the US going forward, despite that the new drug’s pricing of US$180,000 per person per year is higher than previously expected.” In the US, the number of people with PV who are administered Besremi is projected to rise by 800 per year after the drug is launched there, with US sales of Besremi likely to reach US$100 million next year and increase by US$100 million every year after that, Yuanta said. “Besremi might also cut into the sales of other first and second-line PV drugs, with an estimated revenue of US$900 million in the US in 2030,” it said. PharmaEssentia last week reported revenue of NT$42.4 million (US$1.52 million) for last month, up 53.2 percent month-on-month and 10.65 percent year-on-year. Cumulative revenue in the first 10 months of the year totaled NT$318.9 million, an increase of 5.13 percent
Local life insurers reported a combined pretax profit of NT$375.3 billion (US$13.48 billion) for the first 10 months of the year, up 80 percent from last year, on the back of higher investment gains and lower foreign-exchange hedging costs, data released on Thursday by the Financial Supervisory Commission showed. During the 10-month period, their net investment income totaled NT$1.1 trillion, up NT$192 billion from last year, as many insurers booked capital gains from equity market investments, the data showed. They had combined foreign-exchange hedging losses of NT$182.8 billion, an improvement of 22.6 percent on last year’s NT$236.4 billion, while their foreign-exchange losses fell 42 percent to NT$252.6 billion, the commission data showed. The New Taiwan dollar appreciated 2.4 percent against the US dollar in the first 10 months, less than the 3.9 percent rise in the same period last year. With the improvement in profitability, life insurance companies reported a combined book value of NT$2.61 trillion as of the end of last month, up 22.4 percent from a year earlier, the data showed. Separately, property insurers registered a combined pretax profit of NT$21.4 billion for the first 10 months, up 47 percent from a year earlier, backed by higher investment gains, the commission said.
New Taipei City Mayor Hou You-yi, second left, Yilan County Commissioner Lin Tzu-miao, second right, and other guests pose for a photograph at a news conference in New Taipei City’s Banciao District yesterday to promote bluefin tuna caught off the Nanfangao Fishing Port in Yilan County’s Suao Township.
BILLIONS: Tesla CEO Elon Musk wrote on Twitter: ‘It has always been Tesla’s view that all subsidies should be eliminated, but that must include ... for oil & gas’
Tesla Inc is to forgo 1.14 billion euros (US$1.3 billion) of state aid for a factory that it is building in Germany because it has first decided to try to produce a new type of battery cell at scale in Texas, a person familiar with the matter said. The US automaker has been working on so-called “4680” battery cells at a site near its auto plant in Fremont, California. Tesla CEO Elon Musk last year said that after the firm proved it could make them on a pilot assembly line in Texas, it would manufacture them at scale at the factory that it has been constructing outside Berlin. This made Tesla eligible to receive public funds from Germany as part of the EU’s Important Project of Common European Interest initiative, which backs first industrial deployments of battery projects in member states. As Tesla has shifted gears and is further along producing 4680 cells at its factory under construction in Austin, Texas, it is no longer eligible for the money, the person said on condition of anonymity. Tesla informed German authorities that it would not use the support package, German Ministry of Economics and Technology spokeswoman Beate Baron said earlier on Friday, without specifying a reason for the decision. “It has always been Tesla’s view that all subsidies should be eliminated, but that must include the massive subsidies for oil & gas,” Musk wrote on Twitter after the ministry’s announcement. “For some reason, governments don’t want to do that...” Musk, who also runs rocket maker Space Exploration Technologies Corp (SpaceX), has bristled for years at detractors faulting him for taking advantage of government support. Examples of this include the US loan that helped Tesla get the Model S sedan into production, which the company paid back early. After his initial Twitter post, Musk revisited a three-and-a-half-year-old exchange with another
China on Friday amended its tobacco monopoly law to include e-cigarettes, stepping up regulation of the fast-growing vaping industry in the world’s largest tobacco market. The Cabinet order, published on the Chinese government’s Web site and signed off by Chinese Premier Li Keqiang (李克強), takes effect immediately. A number of Chinese e-cigarette companies have been set up in the past few years to tap into domestic sales potential, among them market leader RLX Technology Inc (霧芯科技). RLX said on WeChat that it would heed the rules and make required changes. Chinese regulators in March flagged plans to bring the rules governing the sale of e-cigarettes and other new tobacco products into line with those for ordinary cigarettes. They had previously been in a regulatory gray area. China’s tobacco industry is controlled entirely by a government monopoly, and strict controls determine which companies and retailers can produce and sell cigarettes. The government outlawed the sale of e-cigarettes to minors in 2018 and banned online sales the following year, while Chinese state media have warned of the health and safety risks of using the products. Separately, the Chinese State Administration for Market Regulation proposed new rules that would increase online advertising oversight, including stipulating that advertisements should not affect normal Internet use or mislead users. This year, Chinese authorities have tightened regulation across a range of industries, with an emphasis on technology. Internet advertising must “meet the requirements for the establishment of socialist spiritual civilization and the promotion of excellent traditional culture of the Chinese nation,” the agency said. The proposed rules call on platforms to establish a system for registering and reviewing advertisers and adverts, and “monitor and inspect the content of advertisements displayed and published by using its information services.” The proposed rules also call for bans on advertisements aimed at minors promoting medical treatments, cosmetics and online games “that are
Companies including JPMorgan Chase & Co are stepping up to compensate employees ensnared by Hong Kong’s strict quarantine regime, as businesses in the territory struggle to retain and recruit staff almost two years into the COVID-19 pandemic. As most of the rest of the world is opening up — including rival financial hubs such as Singapore, London and New York — Hong Kong is steadfast in its “COVID-zero” approach, which includes mandating a hotel quarantine of up to three weeks for residents and visitors. A stay at Hong Kong’s quarantine hotel can cost between HK$500 and HK$3,630 (US$64 and US$465) per night for a non-suite room. JPMorgan has offered to reimburse Hong Kong employees up to US$5,000 to compensate for their quarantine stay, in a plan that would remain in effect until November next year. All Hong Kong-based staff members who are executive directors and below could claim the amount for a single quarantine stay for personal trips to visit immediate family members, which includes spouses, domestic partners, children, parents and grandparents. The US bank has 4,000 employees in the territory. The New York-based Morgan Stanley has offered employees as much as HK$40,000 to cover quarantine costs. The one-time reimbursement would be available to all Hong Kong permanent employees when they return from a personal trip to visit immediate family members and in effect until November next year. Goldman Sachs Group Inc has offered employees in the Asia-Pacific region a one-time subsidy of up to US$5,000 to cover costs from a mandatory quarantine effective Dec. 1, a company memo showed. A Hong Kong-based spokeswoman confirmed the content of the memo. The subsidy is in recognition that staff members in the Asia-Pacific region have faced the “additional burden of multiple lockdowns and some of the strictest quarantine measures in the world,” the memo said. Hong Kong needs to achieve a vaccination
An Indian government agency has summoned Amazon.com Inc’s top management in the country, along with officials from Future Coupons Pvt Ltd (FCPL), to question them about a botched deal, the Economic Times reported. The Indian Enforcement Directorate (ED) — the agency that investigates offenses related to money laundering — is examining whether Amazon, which was founded by Jeff Bezos, was in breach of India’s foreign-exchange laws when it invested 14.3 billion rupees (US$190.5 million) to purchase a 49 percent stake in FCPL in 2019, the newspaper said. FCPL owns about 10 percent of Future Retail Ltd, the flagship entity that runs the Big Bazaar, Food Bazaar and Easyday chains. “We are in receipt of summons issued by the ED in connection with the Future Group,” an Amazon spokesperson told the newspaper. “As we have just received the summons, we are examining it and will respond within the given time frame.” The Future Group did not respond to a request by the Economic Times for comment. Amazon, which is trying to block Mukesh Ambani — Asia’s richest man — from taking over the struggling Future retail chain, last week said that money from the local firm was allegedly diverted to other companies. Ambani’s Reliance Industries Ltd and Amazon are fighting for a bigger slice of the only billion-people-plus consumer market that remains open to foreign firms. The Indian government has asked Starlink Internet Services of Elon Musk’s rocket maker Space Exploration Technologies Corp (SpaceX) to comply with the country’s regulatory framework before offering its satellite-based Internet services. The Indian Ministry of Communications said in a statement late on Friday that because Starlink is not the holder of a license, the public is advised not to subscribe to Starlink services that are being advertised. “The same is also evident from the Web site of Starlink (www.starlink.com), wherein satellite-based Internet services can
While many US and European shoppers went on a spree on Black Friday, some groups hit out with boycotts and campaigns against what they deem unfair business practices and the unbridled consumerism of the end-of-year holidays. In the US, the day after Thanksgiving — celebrated the fourth Thursday in November — is marked by frenzied deal-snagging as retailers offer sales to start holiday shopping in earnest, with European companies jumping on the bandwagon in the past few years. Adobe Inc’s holiday season shopping forecast expects US$910 billion in global online spending this month and next, an 11 percent increase over last year, despite inflation and supply chain disruptions. However, while shoppers opened their wallets, some workers, organizations and retailers were taking a stand against what they see as the extreme excesses of Black Friday. “It’s ridiculous to have a day so profitable to owners where workers get paid the same as always,” said one member of a popular Reddit “anti-work” forum (r/antiwork), which has more than 1 million members. Membership of the forum swelled this autumn. The growth coincided with a record 4.4 million Americans leaving their jobs in September, a phenomenon dubbed the “Great Resignation.” The thread sees support for the “Black Friday Blackout” campaign, which encourages Americans not to work, and especially not to buy anything, the day after Thanksgiving. Online retail giant Amazon.com Inc, which launched its promotional campaign on Thursday and pulls in juicy profits over the winter holiday season, is a top target for anti-Black Friday actions. Activists from environmental group Extinction Rebellion on Friday blockaded more than a dozen Amazon distribution centers in the UK, Germany and the Netherlands to protest the company’s social and environmental practices. It blocked the entrances to the UK sites using bamboo structures and so-called lock-on devices, and displayed banners featuring slogans like “Black Friday exploits
From Albert Einstein’s notes to a record-breaking Frida Kahlo to a 6.6 million euro (US$6.79 million) triceratops — auction houses have lately seen a string of record-breaking items going under the hammer and through the roof. Valuations are becoming hard to judge. On Wednesday, the Einstein manuscript went for 11.3 million euros in Paris, five times its expected price. That came just days after a storyboard for the failed 1970s film version of Dune sparked a bidding war that pushed the price 100 times above the valuation to 2.7 million euros. NEW INTEREST Market watcher Artprice credits a transition to online sales for sparking new levels of interest, particularly in the US and Asia. “The auction houses were very behind the times, but COVID forced them to modernize and the result is that online sales have been spectacular and have attracted a new audience,” Artprice founder Thierry Ehrmann said. Many dynamics are changing, he said, giving the example of 30-somethings who prefer to collect art than buy their first home. After an initial freeze as the COVID-19 pandemic took hold last year, online auctions exploded later in the year as millions hunted for new ways to kill time and spend money during lockdowns. With stock markets soaring in the pandemic, the rich got significantly richer, while struggling to find ways to spend it. This has helped push the old masters to new heights. This month alone in New York, a Van Gogh went for US$71.3 million and a Kahlo self-portrait set a new record for the Mexican artist’s work at nearly US$35 million. However, it has also created a hunger for almost anything collectable, from Michael Jordan sneakers (US$1.5 million), to an original copy of the US constitution (US$43 million) to an 800,000 euro bottle of Burgundy wine. “At a time when many art fairs can’t happen in person
The US$410 DeliSofter pot looks much like the rice cookers ubiquitous in Japanese households and it does prepare rice in 24 minutes. However, this invention of two Panasonic Corp engineers is designed to do more and help people with swallowing difficulties. The two women led the creation of a spin-off company, Gifmo Co, to sell the specialized steam cooker, which they say can turn fried chicken soft enough to be sliced with a potato chip. The machine works by first cutting into food with a series of blades and then subjecting it to extremely high pressure at a temperature of 120°C, rendering many familiar foods digestible without sacrificing the original shape or texture, Gifmo said. It promises to restore a sense of normalcy to elderly people’s lives and diets, allowing them to mash food with their tongue alone. The DeliSofter is the latest in a long line of nursing-care gadgets to arise in Japan, which has the world’s highest proportion of people over 65. From mechanized beds to robots that can converse with lonely retirees to Honda Motor Co exoskeletons for walking assistance, the country’s tech firms have come up with a slew of innovations to aid the aged. Panasonic spun off Gifmo in 2019 to address that growing market, targeting a food segment estimated to surpass ￥200 billion (US$1.7 billion) in Japan alone by 2025. “We always wanted to stop providing shredded food and have done what we can, but all options were costly and time-consuming,” said Takahiro Koyama, a care home manager in Panasonic’s home town of Osaka, who bought his first unit in the summer and later got a second. “The best part of the pot is it’s pretty much just a button-press away. Our chefs love it, as they don’t need to dice food they cooked beautifully. Residents are
‘CONCERNING NEWS’: Shares of cruise operators tumbled more than 10 percent, while vaccine makers Pfizer hit a new high and Moderna skyrocketed 20.57 percent
US stocks closed lower on Friday, with the Dow Jones Industrial Average and S&P 500 suffering their biggest one-day percentage drops in months, and pandemic-hit sectors that had gained from a reopening falling sharply after a new SARS-CoV-2 mutation was found. Authorities worldwide reacted with alarm on Friday to the variant found in South Africa, since named Omicron, with the EU and UK among those tightening border controls as researchers sought to establish if it was vaccine-resistant. Cruise operators Carnival Corp, Royal Caribbean Cruises and Norwegian Cruise Line Holdings each plunged more than 10 percent, while shares in United Airlines Holdings Inc, Delta Air Lines Inc and American Airlines Group Inc also tumbled. The New York Stock Exchange (NYSE) Arca Airline Index fell 6.45 percent in its biggest one-day percentage decline since September last year. Retailers dropped 2.04 percent as Black Friday started the holiday shopping season with worries that the new variant would depress store traffic and curb supply. Selling was broad, with big declines of more than 1 percent in all 11 major S&P sectors except healthcare, which fell just 0.45 percent thanks to COVID-19 vaccine makers Pfizer Inc rising 6.11 percent to close at a record high of US$54 and Moderna Inc jumping 20.57 percent. “It is deja vu all over again for like the eighth time,” said Keith Buchanan, senior portfolio manager at Global Investments in Atlanta. “What we understand about this variant could accelerate over the weekend, if there is more concerning news than good news, a lot of people don’t want to be holding risk assets on Monday morning, or are afraid of what that could look like Monday morning,” he said. Despite the sell-off, market participants said the drop was likely exaggerated by the thin volume during the shortened post-Thanksgiving holiday session. The Dow Jones Industrial Average fell 905.04 points, or
Oil prices suffered one of the largest-ever one-day plunges, crashing more than 11 percent on Black Friday as a new SARS-CoV-2 strain sparked fears that renewed lockdowns will hurt global demand. The crash, the seventh-largest ever for Brent crude, the global oil benchmark, might prompt the OPEC+ cartel to reconsider its policy when it meets next week, with the group increasingly leaning toward pausing its output hikes. Benchmark US crude oil for January delivery on Friday fell US$10.24 to US$68.15 a barrel, down 10.4 percent weekly. Brent crude for January delivery fell US$9.50 to US$72.72 per barrel, down 7.8 percent for the week. The sell-off was amplified by low liquidity on a festive day in the US, the breach of several technical supports and Wall Street banks rushing to dump oil futures to protect themselves against positions in the options market. The development apparently wrong-footed many in the oil market who had been comforted by low inventory levels and demand that had rebounded to 2019 levels, said Rebecca Babin, senior energy trader at CIBC Private Wealth Management. “It was a lack of downside that had us continuing to think nothing bad could happen,” she said. “No one was thinking we could get a variant that we’re not familiar with and it could have meaningful impact.” The price drop capped a dramatic week for the oil market, which started when US President Joe Biden challenged OPEC+ by tapping the country’s strategic petroleum reserve in an effort to bring gasoline prices down. China, India, Japan and South Korea all joined the US effort. Oil traders and analysts were divided about whether the flash crash was an excessive reaction to the COVID-19 news. Damien Courvalin, oil analyst at Goldman Sachs in New York, called the drop an “excessive repricing” and said OPEC+ would respond by pausing its production increases by
European stocks posted their worst session in more than year on Friday, as reports of a newly identified and possibly vaccine-resistant SARS-CoV-2 variant stoked fears of a fresh hit to global economy and drove investors out of riskier assets. The benchmark STOXX 600 fell 3.7 percent. It had slid as much as 3.6 percent in early trading, while the volatility gauge for the main stock market hit its highest in nearly 10 months. For the week, it plunged 4.53 percent. Little is known of the variant detected in South Africa, Botswana and Hong Kong, but scientists said it has an unusual combination of mutations and might evade immune responses or make it more transmissible. France’s CAC 40 shed 4.75 percent, leading regional markets lower as shares in plane maker Airbus SE, shopping center operator Unibail SE and Safran SA fell 10 to 11 percent each. UK’s FTSE 100 dropped 3.64 percent, while Germany’s DAX fell 4.15 percent and Spain’s IBEX lost 4.96 percent. Cyclical-heavy European stock markets have already been under stress this week as a resurgence in COVID-19 cases prompted new restrictions in several countries. “While COVID still has an impact on market sentiment, it is not the dominant driver it was a year ago. Political and economic agendas have more breadth,” Hargreaves Lansdown head of investment analysis Emma Wall said. “That said, should we have a difficult winter with returned restrictions expect to see those stock sectors which were most vulnerable before wobble — retail, leisure, entertainment and travel.” Travel and leisure stocks were down 3.9 percent after falling as much as 7 percent after the UK announced a temporary ban on flights from South Africa and several neighboring countries from Friday. The EU is also planning similar moves. Shares in British Airways owner IAG and EasyJet Holdings PLC, cruise operator Carnival Corp PLC and travel
Industrial metals plunged and gold rallied as the emergence of a fast-spreading and highly mutated SARS-CoV-2 strain sparked a sell-off across financial markets. Base metals, including copper and aluminum, fell more than 3 percent in London as investors weighed the risk that the new variant identified in South Africa might spur fresh outbreaks and derail growth in the world’s leading industrial economies. Scientists say it carries a high number of mutations that could make it more effective at evading existing vaccines. The new strain creates fresh risks to the outlook for metals demand, imperiling a recent rebound in prices driven by chronic supply constraints that have led to sharp drawdowns in global inventories. Gold pared recent losses as investors across financial markets questioned whether new outbreaks could complicate central banks’ efforts to withdraw ultra-loose monetary policies. On Friday, traders rushed to cut back their bets on rate hikes, while safe-haven currencies rallied. “Metals prices had been picking up on the back of the focus on fundamental physical tightness,” Amalgamated Metal Trading head of research Tom Mulqueen said by telephone. “Now this new virus variant has emerged and the market is in a flight to safety.” Copper fell as much as 3.5 percent to US$9,459 a ton and traded at US$9,467.50 on the London Metal Exchange, as all base metals traded lower. Spot gold rose 1.2 percent to US$1,809.55 an ounce, while silver traded little changed, and platinum and palladium declined. Gold for December delivery on Friday rose US$1.20 to US$1,785.50 an ounce, down 3.6 percent weekly. “Uncertainty about the possible consequences of the new virus variant clearly reminds the markets that this pandemic is not over yet,” Alexander Zumpfe, a senior trader at refiner Heraeus Metals Germany GmbH & Co, said in a note. “The gold price should remain supported in this environment and the topic of
News of a SARS-CoV-2 variant potentially resistant to current vaccines sent investors dashing for the safety of the Japanese yen and the Swiss franc on Friday, and traders also took profits after an extended rally in the US dollar. The gains in the yen and the Swiss franc came at the expense of the growth-sensitive Australian dollar and Norwegian krone, although thinner volumes after Thursday’s US Thanksgiving holiday made market moves more volatile. The US is to restrict travel from South Africa — where the new mutation was discovered — and neighboring countries beginning tomorrow, a senior official from the administration of US President Joe Biden said. The WHO said it was designating the variant, named Omicron, as “variant of concern,” a label applied only to four variants to date. It could take weeks for scientists to fully understand the variant’s mutations and potential dangers. “If we’re looking at something like this where we have new mutations on mutations of a spike protein it almost feels like the initial working assumption for most market participants is that this is a new phase of the pandemic,” said Bipan Rai, North American head of FX strategy at CIBC Capital Markets in Toronto. “New lockdowns and restrictions will maybe be put in place, and it certainly feels like we’re going to need a new vaccine as well,” he added. One of the main gainers was the yen, which bounced off five-year lows hit this week against the greenback, and jumped almost 2 percent to a high of ￥113.09, its best day since March last year. The euro rose 0.97 percent to a high of US$1.1312, although it fell to more than six-year lows against the resurgent Swiss franc, at SF1.0428 per euro. “This is a textbook flight to quality into yen and the
Asian markets sank on Friday over fears of a new SARS-CoV-2 variant that scientists warn could be more infectious than Delta and more resistant to vaccines, potentially dealing a heavy blow to the global recovery. The Omicron strain has been blamed for a surge in fresh cases in South Africa and has already cropped up in Hong Kong, with the WHO designated it a “variant of concern.” The discovery of the Omicron variant has led the UK and Israel to ban all travel from the country and five others in southern Africa, as officials look to prevent it from taking hold in populations and spreading quickly. “Early analysis shows that this variant has a large number of mutations that require and will undergo further study,” the WHO said. The news has hammered confidence in Asian markets, which were already under pressure as traders prepared for the US Federal Reserve to start tightening its monetary policy to fend off surging inflation. On equity markets, Tokyo, Hong Kong and Mumbai were more than 2 percent off, while Taipei, Sydney, Seoul, Singapore, Bangkok, Manila, Mumbai, Wellington and Jakarta shed more than 1 percent. Shanghai saw more limited losses. Firms linked to travel were among the worst affected as investors fretted over the possibility that more restrictions will be brought in by governments. Sydney-listed Qantas Airways Ltd lost more than 5 percent, Hong Kong’s Cathay Pacific Airways Ltd (國泰航空) shed 4 percent and Singapore Airlines Ltd more than 3 percent. Macao casino operators were also hammered in Hong Kong. The TAIEX fell 1.6 percent to close at 17,369.39, down 2.52 percent for the week. Tokyo stocks ended sharply lower as news of the variant spooked investors and strengthened the safe haven yen. The benchmark Nikkei 225 Index managed to trim losses in late trade and ended down 2.53 percent, or 747.66 points, at 28,751.62.