Hong Kong Sounds Warning; Italy Cancels Carnival: Virus Update

The coronavirus continued its global human and economic destruction over the weekend, and the sense of caution in the financial markets showed no sign of letting up as Asian trading got underway.

Hong Kong’s finance chief warned the city is being threatened by a “Tsunami-like cataclysm,” while inside China top leadership pledged further fiscal and monetary steps to help growth rebound.

Austria halted a train from Italy for fear of two infected passengers. This came after Italy — now the virus’s epicenter in Europe — canceled the Venice Carnival and other events. A travel ban affecting about 50,000 people was implemented.

South Korea raised the country’s infectious-diseasealert to the highest level after a 20-fold increase in cases. A Chinese study showed how extended stays on ventilators are straining hospitals at the disease’s epicenter.

Key Developments

  • South Korea raises alert to highest level as cases reach 602
  • Italy infections reach 140
  • China cases rose to at least 76,936, with 2,442 fatalities
  • IMF’s Georgieva says outbreak puts recovery at risk

Click VRUS on the terminal for news and data on the coronavirus andhere for maps and charts. For analysis of the impact from Bloomberg Economics, clickhere.

Read More on the Virus:
Venice Carnival, Fashion Week Canceled to Contain Virus Spread
Millions of Chinese Firms Face Collapse If Banks Don’t Act Fast
In South Korea, Opaque Sect Draws Scrutiny With Virus Spike

Aussie Drops as Caution Reigns in Markets (6:23 a.m. HK)

Australian bonds climbed, while equity futures indicated a soft start across the Asia-Pacific. The Australian and New Zealand dollars weakened.

“Its impact on Chinese business is already deep,” said Charles Gillams, managing director at RJMG Asset Management Ltd. “So, whether that has a one economic quarter impact — of some severity — or is a bigger issue remains unclear.”

Austria Stops Trains Coming From Italy (4:15 p.m. NY)

Austria’s state railroad halted three trains traveling from Italy via the Brenner Pass in response to a rash of virus cases in its southern neighbor, officials said.

Hong Kong Companies Have No Safety Net (4:05 p.m. NY)

That “Tsunami-like” event from the virus in Hong Kong is devastating businesses already hobbled by months of anti-government protests.

Unlike in the U.S. and rival Singapore, businesses in Hong Kong don’t have recourse to any corporate rescue procedure. The lack of a proper legal framework for bankruptcy protection means companies are forced into liquidation, according to Johnson Kong, the president of theHong Kong Institute of Certified Public Accountants.

Air New Zealand Warns Coronavirus Will Hit Earnings (3:20 p.m. NY)

Air New Zealand is joining the pack of airlines warning that earnings will be affected. The carrier said Monday it expects a NZ$35 million ($22 million) to NZ$75 million hit as travel demand to Asia drops.

Airlines across the globe have been hit by the outbreak, from flight bans to loss of bookings to higher operating costs.

U.S. Trade Rep Says U.S. Offshored Too Much of Supply Chain (3 p.m. NY)

White House trade adviser Peter Navarro says the crisis shows, “not surprisingly,” that the U.S. has offshored too much of its supply chain.

Navarro expressed confidence on Fox’s Sunday Morning Futures, saying the “American economy is exceedingly strong and not particularly vulnerable to what happens in China.”

He emphasized his goal to bring more of the U.S. supply chain home. “A lot of it is in China, some of it is in India, some in Europe, but we’ve got to get that back on shore,” he said.

New Cases in Italy Reach 140 (2:20 p.m)

Italian authorities reported cases in three regions: 110 in Lombardy; 21 in Veneto and nine in Emilia Romagna. Of those, 25 are in intensive care. Italy reported its third death on Sunday, a woman in her 80s.

Long Ventilator Stays Strain Hospitals in China (1:50 p.m. NY)

Critical care resources in central China are being strained by coronavirus patients needing a month or more on mechanical ventilators, a study finds.

More than two-thirds of critically ill patients required invasive breathing support, doctors at the outbreak’s epicenter in Hubei province reported.

That burden could become more acute: More than 40,000 people are hospitalized with Covid-19 in Hubei. Among those, 8,853 cases are serious and 1,845 are critically ill.

Italy Reports Third Death (11:46 a.m. NY)

Italy confirmed a third death from the coronavirus as infections climbed to 132. Prime Minister Guiseppe Conte said on RAI television that he’s confident the country can limit the contagion. The Lombardy region has entered into phase two of limiting and containing the spread of the virus, Lombardy health official Giulio Gallera said at a briefing in Milan.

“We are ready to increase measures and restrictions if needed,” Attilio Fontana regional governor of the Lombardy region said. La Scala opera house is among the public buildings that suspended performances as a precaution.

Passengers Test Positive in U.K. (11:32 a.m. NY)

Four more patients have tested positive for the coronavirus in the U.K., Chief Medical Officer Chris Whitty said in astatement. They arrived in the country yesterday on an evacuation flight with 32 passengers from the quarantined Diamond Princess cruise ship from Japan and are being taken from the quarantine location to specialist NHS infection centers. The total number of cases in the U.K. is now 13.

EU Says More Containment May Be Needed (11:25 a.m. NY)

The European Centre for Disease Prevention and Control said more cases in Italy and the EU are expected in coming days. “These extraordinary measures in northern Italy are essential to limit the outbreak and may need to be replicated in other communities in the coming days,” it said in astatement. The ECDC is monitoring the situation and will issue an updated risk assessment with the next 24 hours.

Virus Could Put Recovery at Risk: IMF (8:55 a.m. NY)

The virus outbreak has disrupted economic activity in China and could put global economic recovery at risk, Kristalina Georgieva, managing director of the International Monetary Fund, said in a statement after the G-20 meeting. “Even in the case of rapid containment of the virus, growth in China and the rest of the world would be impacted,” Georgieva said. “We all hope for a V-shaped, rapid recovery—but given the uncertainty, it would be prudent to prepare for more adverse scenarios.”

Turkey Shuts Border With Iran (8:48 a.m. NY)

Turkey will temporarilyclose its border with Iran and halt train services between the countries, Health Minister Fahrettin Koca said on Sunday. Turkey has no known cases of the coronavirus, while Iran has the most in the Middle East, with 43 including eight fatalities. Jordan won’t allow entry to expatriates coming from Iran, South Korea and China, Minister of State for Media Affairs Amjad Adaileh said. Jordanians returning from these countries will undergo a two-week quarantine.

Venice Carnival, Public Events Halted (8 a.m. NY)

Authorities in Venicecanceled all public events for a week, including the remaining days of the city’s flagship Carnival celebration, the head of the regional government said. Milan adopted similar measures, which will likely affect the rest of its Fashion Week.

Italy has 132 confirmed cases, the country’s head of civil protection said at briefing. Of those, 22 are in intensive care and others are isolated after the relatives of known patients were tested. Lombardy has suspended schools and other public spaces and events. Bologna University is closed until March 2.

Third Diamond Princess Passenger Dies (7:07 a.m. NY)

A third passenger from the Diamond Princess cruise ship docked in Yokohama died, Japan’s health ministry said in a statement, citing pneumonia as the cause of death. The victim was a Japanese man was in his 80s.

Iran Reports Eighth Death, 43 Cases (6:19 p.m. HK)

The number of infected people has reached 43, including the eight fatalities, Kianoush Jahanpour, a spokesperson for the health ministry, said on state TV. Iran has the highest number of coronavirus cases in the Middle East. Seven of the new infections are in Qom, the epicenter of the outbreak in the country, four in Tehran, and the others in Gilan, Mazandaran and Markazi provinces, he said. Kuwaitstopped ships from Iran calling at its ports.

China Central Banker Sees Limited Economic Impact (11:56 a.m. HK)

China has sufficient policy scope to address the impact of the coronavirus on the economy, which will prove limited, according to People’s Bank of China Deputy Governor Chen Yulu, the central bank said in a posting Sunday. Chen in a Financial Times column Feb. 20 wrote that China will probably see a “V-shaped” recovery.

China’s top leaders pledged amore proactive fiscal policy after a Feb. 21 meeting, and the PBOC signaled further monetary steps to come.

Hubei Has 96 Deaths for Total of 2,346 (6:10 a.m. HK)

China’s Hubei province on Sunday reported an additional 630 cases on Feb. 22, and 96 further deaths. It said 1,742 patients were discharged. The death toll in the epicenter of the disease now stands at 2,346 people.

Those tallies account for the majority of the national totals in China, which now stand at 2,442 dead and 76,936 cases.

— With assistance by Ian Fisher, Tony Czuczka, Hailey Waller, Andrew Davis, Sara Marley, John Follain, Alessandro Speciale, Jason Gale, and Kiuyan Wong

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