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Wednesday, 11 March 2020

The global business travel sector is expected to take a revenue hit of about $820 billion (634.92 billion pounds), with China accounting for nearly half of the losses, as corporates curb travel plans in the face of the coronavirus epidemic, an industry body said on Tuesday.

Business travel to Asia has been the worst hit, with at least three out of every four companies reporting they have cancelled or suspended all or most business trips to China, Hong Kong, Taiwan and other Asia-Pacific countries, according to a survey by Global Business Travel Association (GBTA).

The industry group's latest estimate is sharply above its February forecast of a $560 billion hit. The fast-spreading virus, which originated in the central Chinese city of Wuhan, has killed more than 4,000 people, mostly in China, while disrupting businesses globally.

"Coronavirus is significantly impacting the business travel industry's bottom line," GBTA Chief Operating Officer Scott Solombrino said in a statement.

"The impact to the business travel industry ? and to the broader economy ? cannot be underestimated."

China, which has seen a 95% drop in business travel since the outbreak, is expected to lose $404.1 billion in revenue from corporate travel, followed by $190.5 billion in loss for Europe.

Airline and hotel industries, which typically are the biggest beneficiaries of corporate spending, have taken a major hit to their revenue as the virus continues to spread, the industry group said.

 

Published in World
Indications emerged on Monday that the African Development Bank (AfDB) had endorsed an outlay of $200 million (around N61.2 billion) for Nigeria to develop its decrepit power transmission facilities.
 
According to reports obtained in Abuja on Monday, the money was approved last week by the AfDB management to be utilised under Nigeria’s Transmission Expansion Programme.
 
Wale Shonibare, Acting Vice President Energy, Power, Climate and Green Growth made the revelation during its team’s visit to the Minister of State for Power, Goddy Jedy-Egba.
 
“We’ve come to recap the progress we are making with our several investments within the power sector in Nigeria around the Nigeria Electrification Project, working with the Rural Electrification Agency where our board approved $200m.
 
“And we also have the work we are doing with the transmission company under the NTEP programme where we’ve approved $200m for phase one and there is a phase two. It is a $410m programme,” Mr Shonibare said.
 
He went further to say “for the NTEP programme, it was signed last week and so the investments will start flowing into the sector very soon.
 
“Over the coming months, we will be looking to progress into the second phase of the power transmission programme.”
 
Concerning the REA programme with the bank, Shonibare said “that has already been signed and it is under implementation as we speak. In fact, I am here to flag off the beginning of that programme for the REA.”
 
He also disclosed that the AfDB had begun discussion with Distribution Companies (Discos) as the bank intends to invest in distribution as well.
 
“We are also supporting government on the Jigawa Solar Project where we provided $1m to support feasibility studies for phase one and we will be looking at phase two, going forward.
 
“We are also looking at ways in which we can intervene in the distribution sector. And that work is going on right now, to see what’s the best way of supporting investments in distribution.”
 
On his part, Jedy-Agba said “the AfDB has offered to invest more in our power sector. They have offered to increase their funding and diversify from REA to other things as well.”
Published in Bank & Finance

Oil prices climbed for a second day on Wednesday as hopes U.S. producers would cut output lent support, but gains were capped by growing doubts about Washington's stimulus package to fight the coronavirus, which continues to spread globally.

Brent crude futures rose $1.26, or 3.4%, to $38.48 a barrel by 0418 GMT, while U.S. West Texas Intermediate (WTI) crude gained $0.91, or 2.7%, to $35.27 a barrel.

They have recouped nearly a half of the Monday's 25% loss, which was triggered by the clash of oil titans Saudi Arabia and Russia.

"Expectations that U.S. shale oil producers will need to trim output helped improve the market sentiment," said Satoru Yoshida, a commodity analyst with Rakuten Securities.

U.S. shale producers, including Occidental Petroleum, deepened spending cuts that could reduce production after crude prices slumped to their lowest levels in more than three years.

Oil and equity markets staged solid rebounds on Tuesday after the previous day's pummelling, on signs of co-ordinated action by the world's biggest economies to cushion the economic impact of the epidemic.

But growing scepticism about Washington's stimulus package knocked the steam out of an earlier rally in Asian shares on Wednesday.

The fast-spreading coronavirus also weighed on investor risk appetite. The death toll in Italy due to the virus jumped to 631, while China's new cases rose for the first time in five days as infected individuals arrived from overseas.

"The rebound in crude oil is not expected to last long, with Saudi and Russia boasting about how much they can boost output by as the battle for market share begins," ANZ said in a note.

Saudi Arabia said on Tuesday it would boost its oil supplies to a record high in April, raising the stakes in a standoff with Russia and effectively rebuffing a suggestion from Moscow for new talks on production levels.

"Saudi had failed to boost its market share when it temporarily raised output in 2014 as U.S. shale oil producers showed stronger tolerance to tanking oil prices due to improved efficiency, underlining Saudi's limited influence as a swing producer," Ito Mashino, an analyst at Mitsui & Co. Global Strategic Studies Institute, said.

"Still, the breakdown of the latest round of OPEC+ talks won't mean the end of OPEC+ framework...their actions will depend on oil prices," she said.

U.S. crude oil inventories rose in the most recent week, while gasoline and distillate stocks dropped, data from industry group the American Petroleum Institute showed on Tuesday.

 

Published in Engineering
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