Bangladesh Garment Manufacturers and Exporters Association (BGMEA) on Monday said buyers have so far cancelled orders worth US$ 2.87 billion following the outbreak of coronavirus.
About 1,041 factories reported 906.68 million pieces worth US$ 2.87 billion export have either been cancelled or held up until 5pm on Monday, according to BGMEA sources.
This cancellation will affect approximately 2.08 million Bangladeshi workers, the sources said.
Earlier on March 23, BGMEA President Dr Rubana Huq said buyers so far cancelled orders worth US$ 1.48 billion.
On a video message she said “We’re facing a dire situation. All the buyers from different places, countries and continents are suspending the orders.”
Citing entries of 1,089 garment factories to their website, the BGMEA chief said 873,236,622 orders have so far been cancelled.
She also said there are 12 lakh workers in those factories.
Asian markets started the week with fresh losses as countries reported surging numbers of infections from the coronavirus that has prompted shutdowns of travel and business in many parts of the world.
Japan's benchmark fell nearly 3% and other regional markets were mostly lower. Shares in Australia surged 7% after the government promised more recession-fighting stimulus.
"We want to keep the engine of our economy running through this crisis," Prime Minister Scott Morrison told reporters in Canberra.
The unprecedented $130 billion package includes wage subsidies of up to $1,500 per two weeks to businesses to keep workers on the job.
U.S. futures rebounded, gaining nearly 1%, but oil prices were lower.
Tokyo's Nikkei 225 lost 2.8% to 18,851.04, while the Kospi in South Korea reversed early losses, gaining 0.4% to 1,717.10. The Shanghai Composite shed 0.7% to 2,752.53, while the Hang Seng in Hong Kong lost 0.4% to 23,399.38.
Shares fell in Taiwan and Southeast Asia. India's Sensex fell 2%.
Hopes that a $2 trillion relief bill would ease the economic havoc brought by the pandemic fell flat on Friday, as the major indexes ended lower. The S&P 500 still gained 10.3% last week, its biggest weekly win since 2009. The Dow Jones Industrial Average's 12.8% weekly gain was its biggest since 1938. But the market is still down 25% from the peak it reached a month ago.
The pandemic relief bill approved by the Congress and signed Friday by President Donald Trump includes direct payments to households, aid to hard-hit industries like airlines and support for small businesses. Analysts expect markets to remain turbulent, however, until the outbreak begins to wane.
"Sentiment once again took a turn for the worse going into a week of reckoning by means of economic fundamentals," Jingyi Pan of IG said in a commentary. "The rally seen for Wall Street last week may amount to little more but a relief rally with sentiment turning sour once again going into a fresh week."
The push to deliver financial relief has gained urgency worldwide as the outbreak widens. The number of cases in the U.S. has now surpassed those in China and Italy, climbing to more than 142,000 known cases, according to Johns Hopkins University. The worldwide total has topped 723,000, and the death toll has topped 34,000, while nearly 152,000 have recovered.
For most people, the new coronavirus causes mild or moderate symptoms, such as fever and cough that clear up in two to three weeks. For some, especially older adults and people with existing health problems, it can cause more severe illness, including pneumonia, or death.
The damage to corporate profits, the ultimate driver of stock prices, remains uncertain. Very few companies have dared to issue forecasts capturing the damage, though traders are girding for discouraging results in the next few weeks as earnings reporting season begins. Many companies have simply withdrawn their profit forecasts altogether.
At the start of this year, analysts expected S&P 500 companies' earnings would grow 4.4% in the January-March quarter. They now expect earnings will be down 4.1%, according to FactSet.
Earnings for airlines, which have been hit by lost bookings as businesses and individuals canceled travel plans to minimize their risk of contracting the virus, are expected to be catastrophic. Delta went from an expected 2.2% decline to a 108% plunge.
Energy companies have suffered, meanwhile, by a plunge in oil prices partly due to a price war that broke out early this month between Saudi Arabia and Russia. The energy sector of the S&P 500 has lost half its value this year.
U.S. benchmark crude dropped 4.2% or $91 cents on Monday to $20.60 per barrel in electronic trading on the New York Mercantile Exchange. It slid 4.8% to close at $21.51 a barrel on Friday. Goldman Sachs has forecast that it will fall well below $20 a barrel in the next two months because storage will be filled to the brim and wells will have to be shut in.
Brent crude, the international standard, gave up 4.2% or $1.16 to $26.79 per barrel.
The yield on the 10-year Treasury slipped to 0.67% from 0.68% late Friday. Lower yields reflect dimmer expectations for economic growth and greater demand for low-risk assets.
In currency trading, the dollar was at 107.75 Japanese yen, down from 107.94 late Friday. The euro weakened to $1.1078 from $1.1142.
India's central bank on Friday cut its key interest rate by a sizable 75 basis points to 4.4% from 5.15% to ease financing troubles caused by the coronavirus outbreak and help revive the economy.
That's the lowest benchmark rate the Reserve Bank of India has charged on lending to commercial banks, its so-called "repo rate," since March 2010.
The announcement by RBI Governor Shaktikanta Das came a day after India's finance ministry announced a 1.7 trillion ($22 billion) economic stimulus package. The package included delivering grains and lentil rations for three months to 800 million people, some 60% of the world's second-most populous country.
The RBI held a monetary policy committee meeting nearly a week early to cope with the disruptions to the economy due to a three-week lockdown announced by Prime Minister Narendra Modi on Tuesday.
The RBI will also allow banks a 3-month moratorium on payments of installments on loans.
Bangladesh Garment Manufacturers and Exporters Association (BGMEA) on Wednesday thanked Prime Minister Sheikh Hasina for announcing stimulus package of Tk 5,000 crore for the export-oriented industry to overcome the impact of coronavirus.
"Thank you Prime Minister for your endless empathy for our workers and industry," said BGMEA President Rubana Huq in a message.
She said they spent sleepless nights worrying about the fate of the workers.
"Infinite gratitude to you (PM) for having given us this support at a critical time when orders stand cancelled and we face uncertainty," Huq said.
She also thanked the Prime Minister for paying attention to their request for a lifeline at the most challenging time ever in the history of RMG. "Thank you for listening. Thank you for helping out all including the needy and the most under privileged."
This money will be used for providing the salaries and wages of workers and employees only.
Some 936 factories reported 800.18 million pieces worth $2.58 billion export order cancellations or held up affecting 1.92 million workers, BGMEA said on Wednesday.
Bangladesh is the second largest exporter of readymade goods after China and the country earns the majority of its foreign currencies from this sector.
The rapid spread of the coronavirus since it was first reported in China has dealt an unprecedented shock to the global economy. Here's a look at developments Tuesday as central banks, businesses and workers attempt to navigate a global outbreak that has brought economic activity to a standstill.
The latest developments in global financial markets can found here.
GLOBAL ECONOMY: G7 officials plan to coordinate weekly on the implementation of various support efforts and they vow they are ready to take further action.
They pledged Tuesday to do "whatever is necessary" to restore economic growth and protect jobs and the financial system in the wake of the coronavirus outbreak. Finance ministers and central bank governors from the Group of Seven major industrial countries — the United States, Japan, Germany France, Britain, Italy and Canada — said that they were committed to delivering government support to help their countries rapidly from the widespread shutdowns that have occurred.
The G7 noted support from the U.S. Federal Reserve and other central banks and said the global financial system was in better shape to withstand shocks now than it was during the 2008 financial crisis because of the banking reforms.
WAR CHEST: With the duration of the global outbreak unknown, the largest corporations in the world are cancelling dividends, slashing costs, some through job cuts, and withdrawing financial outlooks.
Chevron slashed its 2020 capital spending plan by 20% Tuesday, or about $4 billion. Chevron Corp. said Tuesday that it's goal is to lower run-rate operating costs by more than $1 billion by the end of the year.
General Motors withdrew its financial guidance for this year. The Detroit automaker is drawing $16 billion from credit lines as it tries to weather closed factories and falling global auto sales. The company says the money will add to its cash position of between $15 billion and $16 billion expected at the end of March.
Intel suspended its stock repurchase plan to conserve cash. The chipmaker said in a regulatory filing Tuesday that it "has kept its factories operational while safeguarding the health and safety of employees and continues to have a strong balance sheet."
REPURPOSING: Ford has partnered with 3M and GE Healthcare to create more medical equipment and supplies for health care workers, first responders and patients fighting coronavirus.
Ford is working with 3M to make powered air-purifying respirators. It is teaming with GE Healthcare to expand production of a simplified version of GE Healthcare's existing ventilator design to support patients with respiratory failure or difficulty breathing.
In an interview with The Associated Press, Executive Chairman Bill Ford likened the effort to the World War II Arsenal of Democracy when the company shifted a factory to build thousands of bombers. His company has drawn credit lines to prepare for a downturn, but still is dedicating resources to fight the virus although it might not generate any revenue, he said
"Frankly we haven't spent any time talking about that because the country needs us," he said. "It's the right thing to do. We'll sort all that out later as we go through this."
Ford will also assemble more than 100,000 plastic face shields per week at one of its manufacturing sites and will also use its in-house 3D printing capability to make components for use in personal protective equipment.
The company already is producing masks and will test them at Detroit-area hospitals. It may build the simplified ventilators at a Ford factory but nothing is solid yet.
The companies also said they didn't have a time frame for when the ventilators might be produced. Ford also is looking at repurposing vehicle parts for use in respirators for health care workers and first responders such as the small fans used to cool seats in the F-150 pickup truck.
NIKE ONLINE: Nike's online sales jumped in China during the coronavirus outbreak there, helping the company offset a plunge in revenue from thousands of shuttered stores in that country.
Nike CEO John Donahoe said the company moved swiftly to leverage its digital platforms in China after it closed more than 5,000 stores there, most of which have since reopened. Digital sales in China jumped 30% in the third quarter ending Feb. 29, even as overall sales in the country fell 4%.
Donahoe said the company will follow a similar playbook as the pandemic spreads to other regions. He said Chinese customers flocked to Nike's training apps during the country's lockdown.
Nike's stores in the U.S. and Western Europe have been closed since March 16. The company said it will re-open them on a location-by-location basis, depending on developments.
Donahoe said the company is seeing sales bounce back briskly in China, where the outbreak has eased and most Nike stores have reopened. Donahoe said Nike expects a similar comeback in countries where stores are now shuttered. Even so, the Beaverton, Oregon-based company did not post guidance for the 4th quarter, citing too much uncertainty surrounding the length of the crisis and its overall economic impact.
FACEBOOK FALLOUT: Facebook said its advertising business will take a hit from the global coronavirus-related shutdowns even though usage of its services is soaring while people are stuck at home, isolated from friends and family.
The social media giant said Tuesday that it's seeing increased traffic on its messaging services, which include WhatsApp, Messenger and Instagram's messaging service. The company says it's also seeing more people using Facebook's primary feed, as well as the stories feature that lets people post disappearing photos and videos.
But the company says it doesn't make money from many of the services where it's seeing increased use. There are no ads on WhatsApp, for instance and they are limited on Messenger.
DARK SKIES: The outbreak and global recession will do more financial damage to airlines than previously estimated, according to an industry trade group.
The International Air Transport Association said Tuesday that it now estimates that passenger revenue worldwide could fall as much as $252 billion, or 44%, compared with last year. Less than three weeks ago, the group estimated the virus could reduce airline revenue by up to $113 billion compared with 2019, before a new round of travel restrictions that have stopped most international air travel.
And Canada's second biggest airline said almost half its employees are leaving amid the pandemic. WestJet said 6,900 employees are leaving the company with 90% exiting voluntarily.
FACTORY SHUTDOWNS: Ford indefinitely suspended planned re-openings of its North American factories, even as the Trump administration pushes for a broad normalization of business activity.
Last week Ford, General Motors and Fiat Chrysler, under pressure from the United Auto Workers union, agreed to stop production until the end of March due to the threat of the coronavirus. That, Ford said Tuesday, is no longer the plan. The automaker is assessing options and working with U.S. and Canadian union leaders. A message was left seeking comment from Fiat Chrysler. GM has closed its factories in North America and elsewhere to deal with the virus.
FLAMING OUT: The delay of the Olympics until 2021 could have major financial consequences for NBCUniversal. NBC paid $4.48 billion for the four Games between 2014 and 2020 and has sold $1.25 billion in ads against the Tokyo Olympics.
NBC's parent company Comcast said earlier this month that it has language in its contracts and insurance that help protect it financially for the money poured into its coverage of the Olympics. But it will miss out on ad-driven profits, which were $250 million for the 2016 Rio Olympics.
It will also miss the on a chance to promote its upcoming streaming service, Peacock, which it had tied to the Summer Games. NComcast said in a regulatory filing that the coronavirus and the measures taken to stop the virus from spreading are affecting its businesses in several ways, including theme park closures, movie premiere delays, canceled sports and the shutdown of TV and film production. The company said that the virus could have a "material adverse impact" on its financial results.
TO YOUR HEALTH: The spread of the coronavirus has changed life as the world knew it, and that includes how we imbibe.
Money once spent on booze in pubs, restaurants and bars, is going to six-packs or cases of wine and beer consumed at home, according to a regulatory filing Tuesday by Constellation Brands.
Cities from San Francisco to New York have shut down the places where people gathered, at best allowing pick-up or delivery. Orders for alcohol meant to be consumed outside of bars or restaurants spiked by 30% over the past four weeks at Constellation Brands, the maker of, among other things, Corona beer. Constellation, which also makes Funky Buddha beer,and wines like Clos du Bois, as well Casa Noble Tequila, and High West Whiskey, is shifting operations to accommodate home drinking.
ROOMS AVAILABLE: Hotel and home-sharing companies are offering free or discounted rooms to medical workers around the world.
Budget brand Oyo Hotels said doctors, nurses and other medical personnel can stay at any of its 300 U.S. properties for free if they show identification. Oyo, which is based in India, will cover the cost of their stays.
France's AccorHotels has offered up to 2,000 beds to the French government to house the homeless. AccorHotels is also offering free stays for medical workers. In Manchester, England, two hotels owned by former soccer stars have closed to the public but are offering 176 free beds for medical workers.
Home-sharing company Airbnb said Tuesday that hosts in France with whole homes or apartments will start hosting medical workers for free; Airbnb will pay a $53 cleaning fee for every doctor, nurse or social worker who books. Airbnb said 1,500 hosts had offered homes within hours of the announcement. Airbnb made a similar offer in Italy last week, where 2,500 homes have been offered. In some cases, hotels are also being used as medical facilities.
Maryland Gov. Larry Hogan announced Monday that Baltimore's convention center and adjacent Hilton hotel will be set up to take patients if hospitals run out of beds.