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Economy

Japan household spending slumps as curbs hit travel, dining out

TOKYO (REUTERS) – Japan’s household spending fell at the fastest pace on record in May as consumers heeded the authorities’ calls to stay home to contain the coronavirus pandemic, pushing the world’s third-largest economy deeper into decline.

The large spending drop will add to growing pressure on policymakers to ramp up moves to restore confidence among businesses and in particular consumers.

Household spending slumped 16.2 per cent in May from a year earlier, government data showed on Tuesday (July 7), falling at the quickest pace since comparable data became available in 2001.

The drop, which was larger than a median market forecast for a 12.2 per cent fall, extended an 11.1 per cent decline in April.

A spending recovery is expected to be slow and fragile as households remain reluctant to loosen the purse strings even after a nationwide state of emergency was lifted in May.

“The pace of recovery is worrying,” said Atsushi Takeda, chief economist at Itochu Economic Research Institute.

“Even though the government has rolled out policy measures, it’s difficult for their impact to come out quickly.”

MIXED PICTURE

Still, the Bank of Japan is expected to maintain its view in its quarterly report next week that the economy will gradually recover later this year.

Tuesday’s data showed large cuts in spending on hotels, transportation and eating out as people stayed at home.

On the other hand, stay-home policies boosted spending on pork and beef, alcohol and sanitary goods like face masks and paper towels.

Last year’s unprecedented 10-day Golden Week holiday to celebrate the enthronement of then Crown Prince Naruhito made the drop in spending more pronounced, partly due to larger than usual spending on tourism in 2019, a government official said.

Overall, the outlook for household spending for the months ahead is dim due to an anticipated rise in job losses, especially among service-sector firms, which is weighing on sentiment.

Separate data on Tuesday showed May inflation-adjusted real wages dropped at the fastest pace since June 2015, adding to signs of stress in the labour market.

Policymakers hope a pickup in domestic demand will be strong enough to bring about an economic recovery, as long as the country is able to avert a big second wave of coronavirus infections.

The government already compiled two spending packages worth a combined US$2.2 trillion to offset the hit from the pandemic, which included cash handouts of 100,000 yen (S$1,300) per citizen.

But spending could take a larger hit going forward if the worsening business outlook forces firms to slash workers’ bonuses, especially in winter, or lay off more workers.

“That, in turn, could cause income levels to drop further,” said Takeshi Minami, chief economist at Norinchukin Research Institute.

“I think a phase of worsening consumption will strengthen in the second half of the year.”

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World News

Beijing city reports no new coronavirus cases, versus 1 a day earlier

BEIJING (REUTERS) – Beijing’s city government reported no new confirmed coronavirus cases for Monday (July 6), down from one reported a day earlier as the city curbs the spread of the disease.

Overall, China reported eight new coronavirus cases in the mainland for July 6, up from four a day earlier, the health authority said.

All of the new infections were imported cases, involving travellers entering China from abroad, the National Health Commission said in a statement on Tuesday.

There were no new deaths.

China also reported 15 new asymptomatic coronavirus cases for Monday, up from 11 a day earlier.

As of July 6, China had a total of 83,565 confirmed coronavirus cases while the death toll remained at 4,634.

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Business

Solar energy company Sunrun to buy peer Vivint Solar for about $1.46 billion

(Reuters) – U.S. residential solar installer Sunrun Inc (RUN.O) said on Monday it will buy peer Vivint Solar (VSLR.N) for about $1.46 billion in an all-stock deal.

Vivint Solar shareholders will receive 0.55 shares of Sunrun for each share held, the companies said in a statement, representing a premium of 10.4% to Vivint’s Monday close.

The deal, unanimously approved by the companies’ boards, is valued at $3.2 billion including debt.

Sunrun’s shareholders will hold about 64% of the combined company, with the rest owned by Vivint Solar’s stockholders.

The deal is expected to deliver annual cost savings of about $90 million, the statement said.

Credit Suisse Securities was the financial adviser to Sunrun, while Morgan Stanley and BofA Securities advised Vivint.

Vivint Solar in May reported an adjusted loss of $1.01 per share in its first-quarter results while withdrawing its full-year forecast. Sunrun posted a net loss of 23 cents per share for the same period.

Business Insider reported in April that Sunrun had laid off at least 100 workers and furloughed another 60 due to the impact of the coronavirus outbreak.

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World News

Vicki Zhao battles divorce rumours

Chinese actress Vicki Zhao is battling rumours of a divorce after it was discovered that she had deleted all posts related to her husband on her Instagram account.

Zhao, 44, best known for her portrayal of Little Swallow in the period drama series My Fair Princess (1998 to 1999), has been married to entrepreneur Huang Youlong, a Singapore citizen, since 2008.

The couple have a daughter born in Singapore, aged 10, and nicknamed “Little April”.

According to Taiwanese news reports, netizens found that Zhao had recently deleted posts on Instagram related to her husband, including a photo of him holding their daughter’s hand and roses that he had given her for Valentine’s Day last year.

That led to speculation that their marriage was on the rocks, but Zhao’s team has shut down the rumours.

In a post on Chinese microblogging site Weibo, her management posted in Chinese last Saturday night: “Chasing the wind and clutching at shadows is so tiring. Gossip cautiously. Work hard.”

“Chasing the wind and clutching at shadows” is the literal translation of a Chinese idiom which is commonly used to refer to groundless rumours.

The post did not say why the photos were deleted.

The couple have been dogged by negative press in recent years.

In 2016, media company Tibet Longwei, reportedly controlled by Zhao and Mr Huang, launched a failed takeover bid of another company. The bid attracted the scrutiny of the China Securities Regulatory Commission due to irregularities.

Zhao and Mr Huang were subsequently barred from trading in the mainland stock market for five years and from taking on key positions at listed companies for five years.

Still, the couple remain a force to be reckoned with.

The Business Times reported in May that Mr Huang bought a penthouse at freehold Ardmore Park condominium, located in one of Singapore’s most exclusive districts, for $27.65 million.

He also owns at least one other unit in the development, a four-bedroom apartment on a low floor in another block.

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World News

Data analytics firm Palantir confidentially files to go public

(Reuters) – Data analytics company Palantir Technologies Inc said on Monday it has confidentially filed paperwork with the U.S. Securities and Exchange Commission (SEC) to go public.

The confidential submission relates to a proposed public listing of the Class A common stock, Palantir said in a statement, adding that the listing is expected to take place after the SEC completes its review process.

A string of successful IPOs is paving the way for Silicon Valley firms, concerned about the economic fallout of the global coronavirus outbreak, to follow suit.

The company did not disclose the size of the offering in its statement.

Reuters had reported last month that the data mining firm was aiming to file confidentially with U.S. regulators to go public, which could be as soon as September, though the timetable is subject to change and market conditions.

Palantir is still deliberating whether to go public via a traditional IPO or a direct listing.

Morgan Stanley (MS.N) would have a leading role in Palantir’s IPO, Reuters earlier reported.

Co-founded in 2004 by billionaire Peter Thiel, the company has been involved in some of the U.S. government’s most politically sensitive projects, from identifying terrorists to the tracking of illegal immigrants.

Palantir was valued at about $20 billion in its most recent fundraising round in 2015. In the private market, its shares have been trading in recent weeks at a valuation of between $10 billion and $12 billion, according to market sources.

The company has also been working with a number of countries to tackle the COVID-19 pandemic, by tracing the spread of the virus and managing the production of critical medical supplies.

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World News

4 reads for July

1 NON-FICTION

LIVES & TIMES OF HRH

By Herman Ronald Hochstadt

NUS Press/ Hardcover / 222 pages/ $38.52/ Available at bit.ly/LTHRH_HRH

Many a civil servant has a story of a formal-function faux pas, but Mr Herman Hochstadt’s is hard to beat.

The former secretary to Singapore’s founding premier Lee Kuan Yew was at a dinner hosted by India’s then Prime Minister Indira Gandhi when he realised the zip of his trousers had given up the ghost.

He quickly tucked his table napkin into the top of his trousers to cover it up. Mrs Gandhi rose to propose a toast and everyone followed suit, Mr Hochstadt included.

He ignored Dr Toh Chin Chye, then Singapore’s Deputy Prime Minister, trying surreptitiously and desperately to signal him. He received a tongue-lashing from Dr Toh later in private, but preserved his modesty.

Such colourful anecdotes pepper the 87-year-old’s memoir, which many people had pestered him to write since his retirement and to which he finally got round about two years ago. “Best be done with it before I leave this world,” he says.

The book relates the history of Mr Hochstadt’s Eurasian family, from the founding of the Singapore Casket Company by his paternal grandfather John Hochstadt to the deaths of his maternal grandparents, John and Helen Phillips, as prisoners of war during the Japanese Occupation.

Much of the book is devoted to Mr Hochstadt’s own years in the civil service, including his time as the late Mr Lee’s secretary from 1962 to 1965, when Singapore seemed to “pop out of Malaysia like a champagne cork, but minus any celebratory froth”, he writes.

Working for Mr Lee was so stressful that Mr Hochstadt at one point attempted to resign.

Mr Lee retorted: “If anyone around here has strain, it is me!”

He added that they had to carry on for Singapore’s survival, however, and gave Mr Hochstadt the day off – only to summon him back to City Hall before lunch.

“No matter how stressful it was, he was a very inspiring person to work for,” recalls Mr Hochstadt in a Zoom interview. “His thoughts were always for Singapore.”

Mr Hochstadt went on to serve in various ministries, including stints as permanent secretary in the Ministries of Education, Finance and Law. He retired from the civil service in 1989 and went on to be High Commissioner to several African nations.

He was married to National University of Singapore chief librarian Peggy Leong, who died in 1991. They have two children.

“What I recorded in the book, I did to reflect, because it was something I was persuaded I should do,” he says. “It’s part of the story of Singapore.”

2 NON-FICTION

NAVIGATING DIFFERENCES

Edited by Terence Chong

ISEAS – Yusof Ishak Institute/ Paperback/ 272 pages/ $38.41/ Available at bookshop.iseas.edu.sg

In this timely collection, social scientists expound on ethnicity, religion, class and culture, examining fault lines that often surface as election issues.

In a chapter on political divides, sociologist and former Workers’ Party Non-Constituency MP Daniel Goh looks at artistic protest and culture war in Singapore, while the Lee Kuan Yew School of Public Policy’s Kenneth Paul Tan argues that the People’s Action Party needs to consider embracing diversity as a “big tent” party.

3 NON-FICTION

REBEL CITY

Edited by Zuraidah Ibrahim and Jeffie Lam

World Scientific/ Paperback/ 461 pages/ $29.96/ Available at bit.ly/RebelCity_IL

In this book, South China Morning Post journalists chronicle Hong Kong’s year of water and fire as protesters clashed in the streets last year with the Beijing-backed authorities.

From the love story turned homicide that underpinned Hong Kong Chief Executive Carrie Lam’s controversial extradition Bill, through the storm of street violence and arrests to the tensions that remain today, this book seeks to record the city’s worst political crisis in decades.

4 NON-FICTION

WAVES OF INDEPENDENCE: MEMOIRS OF A MALAYSIAN DOYENNE

By Gunn Chit Wha

Epigram Books/ Paperback/ 192 pages/ $26.64/ Available at bit.ly/WavesI_Gunn

One of Malaya’s first female lawyers pens her memoir. Ms Gunn, now 92, recounts what it was like to break barriers in the 1950s, becoming the third female lawyer in 20th-century Malaya.

She became the first elected female Municipal Councillor in Kuala Lumpur, standing in the Petaling Ward, and was appointed the first female State Councillor in Selangor.

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World News

Tesla shock: Elon Musk launches new clothing in most bizarre new move

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In addition to his links to the two firms, Musk is known for his outspoken social media presence which tends to polarise followers.

His latest move – satin-red short shorts with ‘S3XY’ stamped on the rear – appears to certainly be one of the most tongue-in-cheek.

And in a nod to well-established but admittedly low-brow internet humour, the shorts are priced at $69.420.

Both Tesla and its CEO have amassed a fan base as loyal and active as their detractors. As such, demand for the shorts was so high that the host website crashed shortly after the announcement.

It’s back up now, though, so viewers who are genuinely inclined to buy a pair can visit Tesla’s online shop to see for themselves. The shorts come in five sizes from XS to XL.

On Tesla’s shop, the item description promises to allow wearers to “run like the wind” or “entertain like Liberace” – a reference to the extravagant American pianist and performer.

The site continues: “Relax poolside or lounge indoors year-round with our limited-edition Tesla Short Shorts, featuring our signature Tesla logo in front with “S3XY” across the back. Enjoy exceptional comfort from the closing bell.”

The downside, apart from the price and questionable fashion statement, is the shipping time.

Whether due to high demand or reasons to do with production, the shorts could take up to a month to ship, from now.

But this gimmick aside, Tesla has made genuine progress in recent weeks in terms of its market value.

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The US-based electric vehicle brand last week surged past rival automaker Toyota to become the most valuable carmaker in the world.

On July 1 Tesla surpassed Toyota’s market capitalisation and its shares closed at $1,119.63 USD, giving it a market cap of $207.6 billion.

Toyota’s shares, on the other hand, closed at $124.14 USD with a market cap of $171.7 billion.

Tesla has, since then, risen even further in value day by day. Shares closed yesterday at $1,371.58, with a market cap of over $254 billion.

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Toyota’s value has risen slightly too, but not with the nearly the same velocity. Its market cap currently sits at $175.4 billion.

Tesla’s high value has led some analysts to voice concerns that it is what’s known as a stock market ‘bubble’.

A stock market bubble occurs when prices escalate rapidly regardless of the fundamental assets of the company to which the stocks belong.

This can be fuelled by speculate demand which fuels inflated prices, rather than what the company is worth in terms of what it owns or produces.

Indeed, the company has never officially turned an annual profit – though by some accounts it finished 2019 with a very narrow one depending on the accounting method one uses, CNN reported in January.

Indeed, the company did post back-to-back quarterly profits in that year, and its huge amount of investment in production – notably its battery ‘gigafactories’ in Germany and China – will have emboldened investors.

Last week Tesla said it delivered a total of 90,650 in its Q2 2020 vehicle production and deliveries statement.

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World News

China fury: Beijing launches extraordinary attack on UK over Hong Kong decision

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Ambassador Liu Xiaoming accused the UK of “gross interference” in its affairs, and reiterated that Hong Kong was part of China.

But British Foreign Secretary Dominic Raab dismissed the comments, referring to China’s responsibilities under the 1980s Joint Declaration it signed with the UK.

This agreement stipulates that China must grant certain freedoms for the people of Hong Kong.

But many fear that Beijing’s move to tighten Hong Kong’s national security laws amounts to a curb on these rights and freedoms.

As a result, the UK has relaxed its immigration rules for around three million Hong Kong residents specifically, which could place them on a path to citizenship.

But China has strongly rebuked the move, with Beijing threatening “corresponding measures” as a result.

In a video statement issued yesterday, Liu said: “These moves [by the UK] constitute a gross interference in China’s internal affairs and openly trample on the basic norms governing international relations.

“The Chinese side has lodged solemn representation to the UK side to express its grave concern and strong opposition.

“I want to emphasise that Hong Kong is a part of China. Hong Kong affairs are China’s internal affairs and brook no external interference.”

However, Dominic Raab told Reuters that the situation was “a matter of trust”, and claimed countries around the world “are asking this question: does China live up to its international obligations?”

READ: Canada rebuked by China after showing serious concern for controversial law

And in a House of Commons session last week, the foreign secretary called China’s new security law “a clear and serious breach” of the joint agreement that China and the UK had signed.

Raab highlighted that the new laws would allow Beijing to take jurisdiction over “certain cases” and to try them in mainland Chinese courts.

This he said, amounted to a violation of two paragraphs in the Joint Declaration, specifically paragraphs 3(3) and (5).

He also blasted the measures as a “flagrant assault” on freedom of speech and of protests for Hong Kong citizens.

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But in yesterday’s statement, Liu highlighted China’s stance on the rules, focusing on their relevance to national security.

He said: “One important task of the National Security Law for HKSAR [Hong Kong Special Administrative Region] is to prevent, suppress and punish collusion with a foreign country or with external element to endanger national security.

“No one should underestimate the firm determination of China to safeguard its sovereignty, security, and development interests.

“Attempts to disrupt or obstruct the implementation of the National Security Law for Hong Kong SAR will be met with the strong opposition of 1.4 billion Chinese people. All these attempts are doomed to failure.”

Liu later claimed in a tweet that China still wants a strong relationship with the UK, despite the disagreement between the UK and China over the Hong Kong law.

In a tweet, he wrote: “China wants to be [the] UK’s friend and partner.

“But if you treat China as a hostile country, you would have to bear the consequences. To quote Dr Zbigniew Brzezinski: ‘If we treat China like an enemy, they will become an enemy.’

“It’s up to [the] UK side to decide what they want in the end.”

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World News

Indonesia earthquake: Huge 6.6 magnitude quake rocks Java coast – tremors strike Bali

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The quake hit around 93.8 kilometers north of Batang, which is a coastal town in Central Java province, according to the US Geological Survey. The gigantic earthquake hit at 9.54am AEST on Tuesday and was as far as 800 kilometres south east in Bali. 

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World News

Kanye EMBARRASSMENT as rapper misses deadline to run for US president in key states

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The Grammy award winning musician announced his plans to run for US president on Twitter on July 5. The ‘Power’ hitmaker wrote: “We must now realise the promise of America by trusting God, unifying our vision and building our future.” He was met with a mixed reaction by many fans, who think he will split the democratic vote and help Donald Trump win re-election. Some shared their enthusiasm for the artist’s election bid, including SpaceX founder Elon Musk, who tweeted: “You have my full support!”

While Kanye has stated his intention to run for president on November 3 as an independent candidate, he has come into the presidential race late and missed major deadlines.

According to Ballotpedia, Kanye needed to register as an independent candidate in some states as early as March to be included.

Because of his late registration, Kanye has missed the chance to run on the ballot in six states.

For the artist to appear on North Carolina’s presidential ballot, he would have needed to register by March 3.

The same is true for Texas and New York, where he would have needed to register by May 11 and May 26 respectively.

Maine required Kanye to apply as an independent by June 1, and New Mexico and Indiana needed the star to apply by June 25 and 30 respectively.

While he could still run in these states as a write-in candidate, those votes may not count because of the state’s differing rules on ballot counts.

If Kanye is seriously mounting a presidential campaign, he would be doing so at a serious deficit, with 102 electoral college votes unavailable to him out of 538.

As well as being late to apply as a candidate, West has also not yet register with the Federal Election Commission (FEC) to make his presidential run official.

While there’s no deadline to apply with the FEC, public records show he hasn’t done so.

An FEC profile does exist for Kanye, but it is presumed to be a fake application, as the middle name listed is “deez nuts” when his real middle name is Omari.

The FEC profile has reported no money raised, and is listed as a Green Party candidate.

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Reactions to the stars campaign announcement has been derisive for the most part, with many citing his late entrance as an impossible hill to climb.

Speaking to the Guardian, James McCann, a political scientist at Purdue University in West Lafayette, Indiana, said he could run as independent or with a smaller party, but both options would be limited.

This is because independent candidates need tens of thousands of signatures from across the US before deadlines, which is more difficult than ever due to the ongoing coronavirus pandemic.

McCann said: “It’s hard to see Kanye West having a field operation.”

Kanye West has previously caused uproars over his vocal support of President Donald Trump.

In 2018, Kanye made a series of controversial remarks, including claiming slavery was a “choice” in a now infamous TMZ interview.

Later that year, Kanye met with President Trump in the White House where he talked about “infinite universes” and Trump’s “energy”.

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