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Tag: coronavirus

  • 73% of CFOs are concerned about the effects of COVID-19 on their operations

    73% of CFOs are concerned about the effects of COVID-19 on their operations

    Nearly three-quarters (73%) of CFOs surveyed in all countries express great concern about the potential impact of the coronavirus on their business, with most (80%) expecting a decrease in revenue, according to PwC COVID-19 CFO Pulse, conducted among more than 800 CFOs in 21 countries.

    When assessing potential financial actions to help mitigate the effects of the coronavirus, most CFO are considering cost containment measures. Thus 77% considering implementing cost reduction, 65% deferring or cancelling planned investments and 48% changing company financing plans.

    Nearly half (45%) of CFOs say their company plans to take advantage of government support programmes offered in response to COVID-19. The most common types of support they are considering are tax payment deferral and extension of tax deadlines.

    In terms of workforce, CFOs in all countries expect a range of consequences for the employees: 42% of respondents expect to introduce furloughs in the coming month, and 28% anticipate layoffs.

    If the COVID-19 crisis were to end immediately, 56% of CFOs expect a return to ‘business as usual’ within three months.

    Other conclusions of the PwC COVID-19 CFO Pulse report

    • CFOs are most concerned about global recession (71%), along with the financial effects of the coronavirus on their company’s operations (70%), decrease in consumer confidence reducing consumption (39%), supply chain issues (31%) and effects on our workforce or reduction in productivity (30%).
    • Of those CFOs considering changes to their investment strategy, most (80%) plan to reduce general CapEx investments. Other potential reductions could come in operations (60%) and workforce (55%).
    • Relatively few CFOs indicate they will cut spending on digital transformation (21%) and cybersecurity or privacy (5%).
    • Only 9% view it as an isolated challenge not currently having a major impact on their business.
    • Relatively few CFOs named difficulties with funding (18%), insufficient information to make good decisions (15%) and cybersecurity (6% )among their top concerns related to the coronavirus.
    • CFOs in Germany, Denmark and Switzerland expressed relatively less concern about the pandemic’s potential impact on their business and are also more sure-footed about their organisation’s ability to bounce back. They also show less inclination to avail themselves of government support programmes.

    The survey was conducted on 14 April  among 824 CFOs in Armenia, Brazil, Colombia, the Czech Republic, Denmark, France, Germany, Greece, Ireland, Japan, Kazakhstan, Mexico, Middle East, Netherlands, Philippines, Portugal, Singapore, Sweden, Switzerland, Thailand and the US.

  • 9 of 10 nonfood retailers expect turnovers to be affected by the Covid-19 epidemics

    9 of 10 nonfood retailers expect turnovers to be affected by the Covid-19 epidemics

    Nonfood retailers in Romania are among the most affected by measures taken during the state of emergency to prevent the spread of Covid-19.

    45% of retail tenants expect over 30% decrease of their turnover in 2020 and another 39% foresee up to 30% declines as a result of these at least 2 months of no trading, with slow recovery expected in the second half of this year, according to a study conducted by Colliers International’s Retail Division among 84 tenants and 21 landlords from the retail sector in Romania.

    Medium to long-term effects are still difficult to evaluate, especially considering uncertainties regarding possible further measures that could be applied by authorities after May 15th. However, retail landlords already have support measures in place for tenants that are affected by the emergency state, like suspending rent payments for the no trading period, potentially with later means of compensation, or closing part of the centers in order to reduce the value of the service charge that is supported by tenants. Colliers International’s study is part of a broader analysis of the overall real estate market outlook, based on relevant insights from all market segments, which is presented in this period with the objective of bringing some clarity about the market.

    88% of the retailers applied for technical unemployment measure

    Retailers’ reaction to the government’s decision to close non-essential stores was immediate and in order to minimize impact of the current context. As a result, 62% of tenants suspended or delayed rental and utilities payments and 52% applied for rent reductions when stores will be reopened, according to Colliers International’s study among retail tenants active mainly in fashion, food and beverage, cosmetics, services, entertainment, services or beauty.

    In addition, to support business recovery, 88% applied for the technical unemployment facility, 48% will use the tax payment delay offered by the state and 33% will suspend the financing payments until the end of year.

    On the other hand, 67% of retailers are concentrating to compensate for the loss from the brick and mortar presence with alternative sale channels, but only part of the loss is expected to be recovered though this channel. About 36% expect online sales to grow this year, of which half count on at least 20% increase. However, 22% of retailers believe sales will decline even on this channel, due to low consumption appetite.

    62% of retail landlords suspended rent payment for non-trading retailers

    Landlords of retail spaces also reacted rapidly in the current context, closing part of the shopping centers, where it was physically possible (67%), renegotiating terms with third party suppliers (45%) and even with banks (29%).

    Almost all of them have also used some available state benefits, such as delay of tax payment (52%), technical unemployment (48%) and delayed bank payments (24%).

    To support their tenants during the Covid-19 crisis, 62% of landlords have chosen to charge only service charges from retailers, in order to keep the retail centers clean, safe and the technical equipment in good order while trading is partially closed.

    In this context, landlords are also expecting to see declines in net operating income in 2020, with 67% estimating a decline of up to 30% and another 24% considering more pronounced declines this year.

    The retail market is expected to recover starting Q4 of 2020

    First signs of recovery in the retail market are expected starting with Q4 2020, but with more consistent results in 2021, which shows that both retailers and landlords are confident in a relatively fast recovery.

    More exactly, 67% of landlords and 51% of tenants expect to return to satisfactory business levels compared to levels before the Covid-19 epidemics by the end of 2021.

  • China’s first ever negative quarterly GDP growth

    China’s first ever negative quarterly GDP growth

    China published its GDP growth rate for the first quarter of 2020. GDP grew by -6.8% y/y in Q1 and -9.8% q/q, the first ever negative figure since the start of the Economic Reform in 1978.

    This number is not surprising given the lockdown brought the economy to a near standstill for almost two months.

    China’s latest data bears more significance than normal. With many around the world still in lockdown, they are looking to China to size the economic costs of COVID-19 containment. The key takeaway is that the costs of lockdown are indeed large.

    Economic costs of the COVID-19 lockdown

    China’s economy contracted by 6.8% in Q1 2020, marking it the first contraction since the quarterly data were published since 1992. The previous official contraction in China was recorded in 1976 on an annual basis.

    Industrial production, a gauge of manufacturing, mining and utilities fell by 8.4% in Q1. But withing that IP rose by 1.1% in March. relative to a 13.5% decline in January and February. The March IP figure was much better than expectations of a 6.2% decline from Bloomberg.

  • 73% of global executives expect COVID-19 to have a severe impact on economy

    73% of global executives expect COVID-19 to have a severe impact on economy

    • 73% of global executives expect COVID-19 to have a severe impact on the global economy;
    • Over half (52%) are having to reconfigure operations, as vulnerabilities in supply chains are exposed;
    • 54% of respondents expect a longer period of slower economic recovery extending into 2021.

    Business leaders are focussing on navigating the immediate impact that COVID-19 has across supply chains, revenue and profitability, while reconfiguring capital allocation and M&A plans for the post-crisis world, according to the 22nd Edition of the EY Global Capital Confidence Barometer (CCB22).

    Almost three-quarters (73%) of respondents to CCB22, a survey of more than 2,900 C-Suite executives globally, expect COVID-19 to have a severe impact on the global economy in the form of supply chain disruption, as well as declining consumption.

    At the same time, executives are reviewing their operating models in response to the crisis. The increasing shutdown of activity in many parts of the world has exposed vulnerabilities in many companies’ supply chains, with over half (52%) taking steps to change their current set up and 41% investing in accelerating automation.

    With just under half of global business leaders (49%) reporting profit margins that are either the same or lower than two years ago even before the current crisis, the vast majority of companies (95%) are bracing for further downward pressures on margins as the global economy slows.

    Preparing for what comes next

    Many companies (72%) already had major transformation initiatives underway, triggered as a result of pressure on revenue targets and to meet profitability goals, according to CCB respondents.

    The majority (72%) are also planning to conduct more regular strategy and portfolio reviews once some normality has returned, executives say that they will focus on prioritizing changes in new investments in digital and technology (43%) and capital allocation across their portfolio (42%).

    Post-crisis recovery points to transformation through M&A

    Despite boardrooms focusing on an unprecedented global health emergency, executives are also planning their future beyond the crisis. While 54% of respondents expect a ‘u’ shaped recovery period of slower economic activity extending into 2021, 38% see a ‘v’ shaped recovery and a return to normal economic activity in Q3 this year.

    Just 8% foresee an ‘L’ shape recovery – a sustained recession period until economic activity returns in 2022.

    With the majority of companies assuming a recovery in the medium-term, the intention to actively pursue M&A in the next 12 months remains at the elevated levels (56%) seen throughout this current deal cycle. As a result of COVID-19, global executives say they will focus more on a target’s business resilience when evaluating a transaction (38%) and are prepared to see valuations come down (39%).

  • XVision scans patients suspected of being infected with COVID-19

    XVision scans patients suspected of being infected with COVID-19

    XVision, a medical platform that analyzes lung radiographs using artificial intelligence, started to be used for the identification of the patients with lung injuries, associated with COVID-19.

    The solution, offered pro-bono, became part of the mobile laboratories for the detection of coronavirus, located in the outdoor spaces of the Institute of Pneumophysiology “Marius Nasta” in Bucharest, respectively of the Emergency Reception Units of the Emergency Clinical County Hospital in Timisoara.

    This new way of medical triage will reduce the risk of contamination of other patients already admitted, but also of the medical staff. In addition, this MedTech solution supports the medical team in managing the extremely high workload during this period.

    Thus, through a partnership facilitated by the Institute of Pneumophysiology “Marius Nasta” in Bucharest, XVision is used to support the triage of patients showing signs of infection with the SARS-COV-2 virus. This hospital unit has two mobile laboratories equipped with X-ray devices for tuberculosis detection. One of the laboratories was sent to the Timișoara County Hospital to facilitate the patients triage process. These mobile units will be used until the end of the pandemic to prioritize patients who require lung X-rays.

    How it works

    The triage system is based on an evaluation score developed by XVision’s radiologists’ team, benchmarked with the scores and standards used globally, at the time being. Based on the algorithm, it describes the similarities between the radiological patterns in the patient’s X-ray and those found in COVID-19 cases.

    As part of the triage, after the X-ray is done in the mobile lab, the XVision application provides a very quick result that is analyzed by the doctors, along with the initial X-ray. Based on it, a decision is made regarding the respective medical case.

    XVision detects signs of pneumonia, even in incipient form, and detects the degree of resemblance to the radiological pattern of pneumonia with that specific to COVID-19.

    The application developed by XVision, is the first of its kind in Romania. It was implemented initially in the Timișoara County Hospital where it helps doctors analyze up to 200 lung X-rays per day, meaning 20% more than in the past.

    Currently, the application generates data related exclusively to the chest area using digital X-rays as basic information. Currently the team is working on developing new algorithms that will be able to analyze chest and cranial CTs.

  • Investors are interested in new real estate projects even in the Covid-19 context

    Investors are interested in new real estate projects even in the Covid-19 context

    Real estate investors still show interest for acquisitions of new projects in Romania, even in the context of the Covid-19 epidemics, shows a study conducted by Colliers International on the investment market among more than 60 real estate companies representing investment funds, developers, asset managers and banks.

    At the same time, almost 70% of the investors active in the land segment claim that they plan to conclude all or at least some of the transactions already on-going, according to a study dedicated to the land market conducted among 115 professionals active in this real estate segment.

    Bucharest remains the epicenter of investments this year

    Most real estate market players are seeking to better understand the current situation before making investment decisions (64%).

    However, almost a quarter of participants to Colliers study declare that, should an opportunity with favorable transaction conditions arise, they would invest even considering the uncertainties of the current context.

    Bucharest remains the preferred location for new investments for about 57% of respondents while over 25% are open to new investment opportunities in regional cities, which could boost the regional real estate market especially as only 5% of them currently hold properties outside Bucharest. Both Bucharest and regional cities remain venues for a buy-and-hold strategy, as most of the respondents owning properties either in Bucharest or regional cities prefer to keep them over the long term.

    74% of investors expect tighter financing terms

    However, investors expect tighter financing conditions and appreciate that the crisis could have long lasting effects on the real estate market, with complex implications both for future rental income as well as prices, Colliers International’s study in the investment market shows.

    Two thirds expect a decrease in financing availability, while 59% believe that financing costs will increase. Consequently, it is expected that good quality projects and relationship track record with the bank will matter increasingly more in the credit analysis process.

    Almost 70% of the investors active in land transactions intend to move ahead with the on-going deals

    In the land market, almost 70% of the active transaction players intend to progress with all or some of the on-going deals in 2020, with 43% of respondents to Colliers International’s study in the land segment expecting to close a transaction in the next 3 months, highlighting the fact that the market is active.

    Furthermore, the majority of the investors who do not foresee the close of a transaction on the short-term expect to complete a deal by the end of the year. Thus, only 16% of the total interviewed do not expect to close any land deal in 2020.

    In terms of the evolution of land prices, 44% of the investors interviewed expect them to decrease in the near future, while a similar share does not have a clear-cut expectation at the moment. The study also reveals that the market sector the investor is acting in (be it residential, office, retail or mixed use) as well as the position in terms of seller or buyer have very little influence on the current perception of land price evolution.

    Covid-19 is expected to have long lasting effects

    More than 67% of investors expect that the implications of the current Covid-19 epidemics on the Romanian economy will last longer than a year, shows the Colliers International study on the investment market.

    However, there is a bit more optimism regarding the real estate market, with 35% counting on a recovery in less than a year, while investors forecasting implications for the real estate market for over a year are fewer (52%) than those expecting effects on the overall economy for a longer timeframe (67%).

    Investors are even more optimistic when it comes to their own company, with 27% expecting to recover in less than 6 months and 38% in less than a year, which can be seen as a sign of trust in their business’ viability.

  • Google searches for business loan up by 317% amid coronavirus pandemic

    Google searches for business loan up by 317% amid coronavirus pandemic

    Data gathered by Learnbonds.com indicates that global interest in business loans has risen on the search engine Google. According to the data, between the first week of April last year and a similar period in 2020, the queries have gone up by 317%.

    Coronavirus impact on businesses

    According to the data, most months saw interest in the subject remain largely constant with an average popularity score of 25. However, a notable spike was witnessed from the second week of March 2020 when the score reached 30. During this period, the Coronavirus pandemic had begun taking a toll on many businesses across the globe.

    In the third week of March, the popularity score significantly rose by 90% to 57. During the last week of March, the score was 89. By the first week of April 2020, the searches had achieved the peak popularity of 100 representing a 317% growth from a year ago. During a similar period last year, the score was 24.

    With the current pandemic, most businesses are looking for a bailout to remain in operation for the next few months. According to the report:

    Jamaicans are the most interested in a business loan

    From a geographical point of view, Jamaicans are the most interested in a business loan with a Google search popularity score of 100. South Africa comes second with a score of 59 followed by Nigeria with a score of 56. Other countries with more interest in business loans include Australia (54), Singapore (49), India (47 ), New Zealand (43), UK (42) Pakistan (42) and the United States (40).

    Business loans are specifically intended for business purposes and they are available in bank loans, mezzanine financing, asset-based financing, invoice financing, microloans, business cash advances, and cash flow loans.

  • Impact of COVID-19 on businesses: 37% interrupted their activity

    Impact of COVID-19 on businesses: 37% interrupted their activity

    37% of companies surveyed have fully or partially interrupted their operations after declaring the state of emergency due to COVID-19 pandemic and 20% have reduced their activity, according to the PwC Romania HR Barometer conducted by PwC Romania at the end of March.

    In this context, 27% say they will definitely apply for technical unemployment.

    The survey included a series of questions regarding the total or partial interruption of the activity, its reduction, the decrease of the turnover and the ability to pay wages. According to the answers:

    • 19% have stopped the activity altogether
    • 18% partially interrupted the activity
    • 19% haven’t interrupted their activity, estimate a decrease by 25% of the turnover and have the ability to pay salaries
    • 10% haven’t interrupted the activity, anticipate the reduction of the turnover by 25% and don’t have the ability to pay salaries
    • 20% reduced their activity, and business will be reduced by more than 25%
    • 14% don’t expect a decrease in turnover.

    In this context, work from home is an opportunity for companies that can implement it due to the specific nature of the activity. According to the study, 19% of companies implemented mandatory work from home for all employees.

    Companies whose activity specificity doesn’t allow them to work from home and whose businesses are affected take into account technical unemployment provisions, as follows:

    • 27% say they will definitely apply for technical unemployment
    • 18% still don’t know if they will apply because the technical unemployment provisions are unclear
    • 18% still don’t know if they will apply because they haven’t analyzed them
    • 5% indicate that they won’t apply them because the current provisions don’t correspond to their activity specificity.

    According to the survey, almost 30% of those surveyed anticipate that they will have the ability to pay wages in the next three months, while 42% didn’t estimate yet.

  • Bucharest service-driven economy among most insulated in Europe

    Bucharest service-driven economy among most insulated in Europe

    The Bucharest economy stands as one of the most insulated service centers in Europe to the negative fallout related to the COVID-19 outbreak, according to Colliers International consultants, who analysed scenarios for various segments of the real estate market.

    This is largely due to Bucharest’s heavy reliance on IT&C activities as well as scientific and professional services, on par with European capitals like Dublin, Paris and London.  That said, Romania’s high integration in global value chains means that it will face significant headwinds given negative developments in the global economy.

    On the other hand, Romania’s status of a fairly small and quite open economy means that real estate markets will not remain immune to global trends. Given that manufacturing has been quite significantly impaired by the Chinese factory shutdown in recent weeks and also taking into account Romania’s heavy reliance on the automotive sector, it means that the impact for the warehouse market should be more significant, but a lot depends on how long this situation will extend.

    While the full impact of COVID-19 regarding the broader economy and the real estate market is highly uncertain, a certainty is that retail and leisure sectors are among the most impacted over the short-term, as per Colliers’ analysis.

    Globally, a best-case scenario would see neutral economic growth over the year following a negative dip in Q2/Q3, with real estate shocks limited primarily to hotels/hospitality, discretionary/experience-led retail assets and logistics/production dependent on non-essential goods, or the China supply-chain.

    A mid-case scenario will not see a recovery until Q1 2021, with broader impacts felt in office markets dependent on the most exposed firms (e.g.  airlines, tour/ events operators, banks/ insurance/ investors and energy companies).

    Capital markets will see a hiatus in activity, but long-term core players continue to make moves in safe-haven markets, especially around more defensive retail, industrial and logistics, office and residential assets.

    Depending on whether it will be a best or mid-case scenario, value-add and opportunistic players will take a ‘wait and see’ approach until pricing and availability/cost of capital becomes clearer. For cross-border investors, Q2/3 FX rate volatility and inability to physically visit/check assets will lead to a push-back on activity.

  • COVID-19 impact on business: 18% of companies estimate a decrease of revenues up to 20%

    COVID-19 impact on business: 18% of companies estimate a decrease of revenues up to 20%

    18% of the surveyed companies estimate a reduction up to 20% of the revenues as a result of COVID-19 pandemic impact on business, while the majority (65%) haven’t made assessments yet, according to the PwC Romania HR Barometer.

    Another 6% of the respondents estimated a decrease of revenues between 20-50%, 2% consider that the decrease will be between 50-80%, while 9% don’t expect a reduction.

    Of the economic sectors that expect a decrease of the incomes up to 20%, transports are detached with a large percentage of answers (75% of the respondents in this sector gave this answer). Also, 25% of the companies surveyed in the automotive industry (manufacturers and distributors) believe that the decrease in revenues will be up to 20%.

    The same estimate was made by 22% of responding companies in financial services, 21% of consumer goods (distribution, logistics) and 20% of energy.

    Measures to protect employees

    The study aims to find out what measures have been taken to protect employees against infection with COVID-19, as well as the period during which they will be applied.

    According to the answers, 89% of the study participants performed disinfection in the office, 85% limited the interactions, 58% instituted work from home only for those who can work remotely, 40% offered protective equipment, 25% implemented work at home for all employees, 13% decided on mandatory  work from home and 13% only for the employees who traveled to risk areas.

    Interaction-limiting measures

    Another question concerned the options considered for limiting interactions in the context of COVID-19.

    Respondents took the following measures: 81% canceled internal and external events; 79% limited foreign travel; 72% limited domestic travel; 55% limited internal and external events; 24% applied the work in turns to avoid crowding.