Via Financial Times

Australia tightens scrutiny of foreign takeovers

Jamie Smyth reports from Sydney

The Australian government has tightened its scrutiny of foreign takeovers over concerns overseas companies could buy up strategic assets on the cheap during the coronavirus crisis.

It follows warnings from two government MPs that distressed companies in the aviation and freight sectors could become vulnerable to takeovers by state-owned enterprises from authoritarian regimes, including China.

Josh Frydenberg, Australia’s Treasurer, said on Monday all foreign investment and takeover proposals would now be scrutinised by the government’s foreign investment review board to protect the national interest. However, he denied the measures were aimed specifically at China, noting Beijing was only the fifth-largest overseas investor in Australia last year while the US was the largest.

“These are extraordinary times and we have seen the value of Australian companies, indeed companies right around world, be severely diminished because of the coronavirus and we don’t want predatory behaviour that is not in the national interest occurring,” Mr Frydenberg told Australian radio.

The temporary changes to regulations will apply to existing and new investment proposals. Previously, most foreign takeovers and investments proposed by private companies were not considered by the Australian government unless they were worth more than A$1.1bn.

Richard McGregor, analyst at Lowy Institute, said the new measures were no doubt made with Beijing’s state-owned enterprises in mind, especially as conspiracy theories are swirling about how China is using the crisis as an opportunity to assert its influence.

“But vultures come in many forms, and I think this will end up applying to lots more companies than just those from China,” he said.

READ ALSO  Italy’s PM survives crunch confidence vote

News you might have missed

Trump extends US social distancing guidelines to April 30 Donald Trump has extended the US social distancing guidelines until the end of April, amid predictions that the number of deaths there could rise to 100 times what the country has seen so far. One of his most senior medical advisers warned that the death toll could reach 200,000, up from just over 2,000 today.

Mexico López Obrador says self-isolation would play into hands of opposition Despite desperate pleas by the health ministry for people to stay at home, Mexican President Andrés Manuel López Obrador again appeared to minimise and politicise the looming Covid-19 crisis.

Ft Lauderdale mayor demands strict docking protocols for Zaandam cruise liner A stricken cruise liner with four dead, two confirmed coronavirus patients and 138 passengers and crew with flu-like symptoms aboard was on course to transit the Panama Canal on Sunday evening en route to Florida.

Nigeria orders two-week lockdown of Lagos and Abuja Nigeria’s president has ordered a two-week lockdown of the commercial capital Lagos and the federal capital Abuja as Africa’s most populous country nears 100 coronavirus cases. He also said all commercial and private aircraft would be grounded.

Moscow to impose full quarantine upon residents from Monday Moscow’s mayor has ordered a full quarantine of citizens from Monday, banning all residents from leaving their homes except for absolute necessities.

New York fatalities climb towards 1,000 New York recorded an additional 237 coronavirus deaths over the last 24 hours, bringing the state’s total to 965.

READ ALSO  Elliott Is First Major Fund To Flee Hong Kong After Its China Annexation

UK could take six months or longer to get ‘back to normal’ It could be up to six months – and perhaps longer – before British people can return to their “normal” lives, according to the deputy chief medical officer. Speaking at the government’s daily press briefing Jenny Harries said lockdown measures would have to be gradually lessened and that dropping restrictions suddenly would be “quite dangerous”.

Oil prices slump, Asia stocks fall as coronavirus measures extended

US oil prices fell below $20 a barrel, Asia equities slipped and US stock futures moved lower as governments said social distancing measures to stem the spread of coronavirus would have to be extended.

West Texas Intermediate, the US benchmark, fell more than 7 per cent to a low of $19.92 a barrel, the lowest level in 18 years, as the hit to global economies from coronavirus dents demand. International benchmark Brent crude was down 5.7 per cent at $23.50 a barrel.

Japan’s Topix fell 2.7 per cent and the Kospi in South Korea was down 3.2 per cent in early trading. The S&P/ASX 200 in Australia was an outlier, up 0.8 per cent. S&P 500 futures slipped 1.2 per cent.

US President Donald Trump announced on Sunday night that the guidelines to avoid social contact would remain in place until April 30, following a warning from one of his most senior medical advisers that the death toll from coronavirus could reach 200,000.

The S&P 500 had ended down 3.4 per cent on Friday as investors piled into haven assets such as US Treasuries ahead of the weekend. The index had gained 10.3 per cent for the week amid relief over a $2tn emergency stimulus package.

READ ALSO  Private equity’s new bet on sport: buy the league

Signs of slowdown in countries’ death rates and growth of cases

Steve Bernard in London

Every day the Covid-19 virus is infecting an increasing number of people. However, the rate of growth in countries is starting to slow.

Among countries with more than 5,000 cases, this is most visible in Spain, which two weeks ago had a growth rate above 40 per cent per day on average and has seen this number fall to about 15 per cent.

The US continues to see increases above 25 per cent per day, but have fallen from recent highs of nearly 40 per cent. Iran, one of first countries to see a major outbreak outside of China, has started to see an increase again in recent days, edging back up to nearly 10 per cent.

The same also looks to be true with deaths.

Among countries with more than 100 deaths, this slowing down is most visible in Spain, which two weeks ago had a growth rate above 50 per cent per day on average, and has seen this number fall to about 20 per cent.

Global coronavirus cases exceed 700,000

Steve Bernard in London

The total number of cases worldwide has surpassed 700,000 on Sunday as an additional 44,279 people were confirmed to have contracted coronavirus.

The US has so far added 9,516 cases in the past day to about 133,000, with 21 states still to report their numbers.