Intel nudges 2022 financial outlook higher as PC sales remain strong

Intel comfortably beat Wall Street expectations in its latest quarter as continued strong sales of PCs during the pandemic made up most of the lost ground from weaker data centre demand, according to figures released late on Thursday.

Despite modestly raising its financial projections for the rest of this year, however, the US chipmaker’s outlook still pointed to a challenging year ahead as it tries to accelerate a turnaround plan, and its shares slipped more than 1 per cent in after-market trading.

The results are the first under new chief executive officer Pat Gelsinger, who laid out an ambitious plan last month to put Intel back at the forefront of chip manufacturing, in the process weighing on its near-term profit margins and pointing to a big jump in capital spending.

The solid financial performance in the first quarter came despite supply constraints that have weighed on the entire industry in recent months, as well as inroads that rival AMD has been able to make into the CPU market as a result of Intel’s slips.

Excluding $1.1bn of revenue from its NAND memory business, which is in the process of being sold to SK Hynix, Intel reported pro forma revenue of $18.6bn for its latest quarter, unchanged from the year before.

Pro forma earnings, before the effect of a $2.2bn charge stemming mainly from a recent jury award against the company in a patent trial, reached $1.39 a share.

Wall Street had forecast pro forma revenue of $17.8bn and earnings of $1.15 a share. Based on formal accounting principles, Intel’s net income fell 41 per cent, to $3.4bn, with earnings per share down 37 per cent at 82 cents.

Intel and Nvidia had both signaled that business in their latest quarters was running ahead of their earlier expectations, thanks to continued strong demand for PCs and gaming as a result of the pandemic. Intel said revenue from its PC division rose 8 per cent in the quarter, to $10.6bn, while revenue from data centre customers fell back 20 per cent to $5.6bn.

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Easing lockdowns boost Snap as users get back to socialising

Snap’s chief executive Evan Spiegel said that the easing of coronavirus lockdowns would boost engagement on his platform as users increasingly co-ordinate socialising, as the company posted bumper first quarter results. 

Sales at Snap, the parent of messaging app Snapchat, rose 66 per cent year on year to $770m in the first quarter of last year, beating analyst expectations of $742m, it said on Thursday. Daily active users reached 280m, up 22 per cent.

“We are optimistic about the engagement trends we are seeing as the world is beginning to open up,” Spiegel said, adding that as restrictions eased in the US in February, the company saw “inflection points” with users posting short video-clip “Stories” about their lives and using its Snap Map feature to share their whereabouts and activities. 

“More recently, we saw a rise in the rate of new friendships and bi-directional communication on Snapchat in late March as people have begun to socialise in broader groups,” he added. 

The upbeat set of results benefitted from delays to privacy changes to Apple’s iOS 14 operating system, which will ban app developers from collecting data on iPhone users without their explicit consent in a bombshell update that is expected to be painful for the online ads industry. 

The changes were expected to come into force towards the end of last year, but will now arrive next week. Snap, which explored frowned-upon ways to circumvent the rules according to a Financial Times report, said it was “not clear yet” what the longer-term impact of the changes would be. 

The company guided year-on-year revenue growth of between 80 to 85 per cent in the second quarter of the year despite the changes – albeit coming from a lower base after the pandemic put a squeeze on Snap’s advertising clients in the second quarter of 2020.

After a troubled 2019, Snap has undertaken a successful turnaround, with investments in its product upgrades and its offering to advertisers paying off. In March, Spiegel told a conference that a previous company forecast of multiple years of at least 50 per cent revenue growth was a baseline achievable even with further growth in user or engagement numbers. 

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Mattel sales jump as toy boom carries into 2021

Mattel booked its strongest first-quarter revenues in six years, lifted by demand for Barbie dolls and Jurassic World action figures as a pandemic-fuelled boom in toy sales carried into 2021.

The toy maker’s net sales surged 47 per cent year on year, blowing past analysts’ expectations, with everything from American Girl dolls to Hot Wheels cars, Mega building sets and Uno card games flying off the shelves. In North America, gross sales of Barbie toys alone more than doubled.

Ynon Kreiz, chief executive, said Mattel also had a strong start to the second quarter, including Easter week, despite the effects of inflation in ocean freight and some materials.

While some of Mattel’s rapid growth in the first quarter can be attributed to weaker Covid-related comparisons, the company gained market share and recorded double-digit sales gains in each of the last three quarters.

“It shows we didn’t just ride the wave,” Kreiz said.

Toy sales have been on a tear during the pandemic, as parents scoop up dolls, plush animals and outdoor games to entertain their kids at home.

Fifty-two percent of US parents spent more on holiday gifts in 2020, led by toys and games, according to Kidz Global research cited by the Toy Association, a trade group. Mattel had a particularly strong fourth quarter, reporting its strongest holiday sales in four years.

Mattel continued to experience robust demand in the first three months of this year, in a sign of enduring demand at a time when economies are reopening and authorities are easing restrictions on social activity.

Demand in retail stores has picked up, while Mattel’s ecommerce business grew by more than half in the quarter, according to Kreiz.

Global doll revenues and sales of action figures, building sets, games and other items rose 69 per cent year on year. Fisher-Price and Thomas & Friends toys drove sales of infant toys 31 per cent higher. Toy car sales gained 16 per cent.

Overall, Mattel registered net sales of $874m, up from last year’s $594m. Analysts were looking for $684m.

Mattel reported a net loss of $115m, compared with a $211m loss a year ago. The company lost 10 cents per share on an adjusted basis, better than the 35-cent loss that analysts expected.

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UK government ‘drowning’ in PPE contract requests, court told

UK government officials complained they were “drowning” in requests from MPs, ministers and other “VIP” contacts as they scrambled to source personal protective equipment at the start of the pandemic, the High Court heard on Thursday. 

The existence of the “VIP lane” for PPE providers only emerged in November after an investigation by the National Audit Office, Whitehall’s spending watchdog, which revealed that those companies were 10 times more likely to be awarded contracts than other businesses. 

Suppliers channelled through the VIP lane included those recommended by either health officials, ministers or MPs, prompting the NAO to conclude that “standards of transparency” had not been consistently met.

Evidence disclosed to the High Court on Thursday suggested that the creation of the channel had in some cases hindered rather than helped the rapid procurement of safety equipment.

An unnamed civil servant wrote in an email that officials were “drowning in VIP requests and high priority contacts” which “do not hold the right certification or do not pass due diligence”. 

The same official on the Covid-19 Emergency PPE Sourcing Team also wrote: “This contact has already been allocated a team member — unfortunately if he jumps to the front of the queue it then has a knock-on effect to the remaining offers of help.” 

The email was disclosed as part of a legal challenge brought by the Good Law Project, a not-for-profit campaign group which is suing the government over its decision to award nine PPE contracts worth £650m to three companies. A substantial proportion of the PPE procured under the contracts is unsuitable for use by the NHS, the Good Law Project claims.

Read more here

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France to proceed with plan to reopen schools

France will press ahead with reopening schools for younger students from Monday and a week later for older ones despite persistently high new daily infections and continued pressure on hospitals.

The country has been in its third lockdown since late March to curb the spread of Covid-19 with a nationwide curfew, strict limits on travel and all non-essential stores and establishments closed. Yet with the more transmissible variant that was first discovered in the UK now the dominant strain in France, the restrictive measures have not proven as effective as earlier lockdowns.

Prime minister Jean Castex said the decline in new infections was “twice as slow” as during previous lockdowns but he defended the choice to reopen the schools. “We believe that the damage from keeping the schools closed for an extended period is catastrophic and can have long-term consequences.”

He also confirmed the government’s current roadmap to progressively reopen the economy and public life starting in May. Earlier it had floated the idea of ending travel restrictions and extending the curfew in early May, and the reopening of outdoor terraces and museums from mid-May.

But Castex cautioned that such plans would be conditional on the continued improvement of health indicators.

On Thursday, 5,981 people were in intensive care units with Covid-19, the second highest total this year and higher than the autumn second wave. France is still reporting an average of more than 30,000 new infections a day, but its vaccination campaign has picked up pace in recent weeks as more supply has arrived. Almost 20 per cent of the population has received at least one dose of vaccine, and 7 per cent has now been fully inoculated.

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One year ago today

The Financial Times has been your guide to the pandemic since the first outbreak was detected. Here are some of the developments we reported a year ago today:

  • The US saw its highest daily increase in coronavirus deaths over a 24-hour period, pushing the total number of fatalities since the outbreak began to just shy of 40,000.

  • Pakistan’s prime minister Imran Khan underwent a test for coronavirus after he met with the head of a charity who later tested positive for the virus.

  • Mexico’s central bank provided a 750bn peso ($31bn) shot in the arm for the ailing economy — equivalent to 3.3 per cent of last year’s GDP.

  • Spain said it would allow children to go for walks. The government shifted course after a torrent of criticism and ended what would have been six weeks of confinement at home.

  • The Dutch government announced a gradual relaxation of the country's lockdown, beginning with the partial reopening of primary schools.

  • The top US independent oil and gas producers asked senior White House officials to hold China to its commitments to buy crude oil in the trade deal struck in January to alleviate pressure on the sector, saying Beijing was giving preference to energy purchases from Saudi Arabia and Russia instead.

  • The most senior civil servant in the Foreign Office said that the UK made a “political decision” not to take part in an EU-wide procurement scheme for PPE and ventilators.

  • Donald Trump said Harvard must pay back $9m in coronavirus federal aid, days after the Ivy League college received rescue funds despite having the world’s largest endowment with more than $40bn in assets.

For all the latest on the pandemic, visit the FT’s coronavirus home page

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US existing home sales cool as prices hit record high

Sales of previously owned homes in the US slowed for a second straight month in March, as record-high prices and higher mortgage rates put a dampener on a surging housing market.

Existing home sales fell 3.7 per cent from February to a seasonally adjusted annual rate of 6m units, the lowest level since August, according to the National Association of Realtors on Thursday. Economists were looking for a smaller decline to about 6.2m.

The drop in sales came as the median price climbed to a historical high of $329,100, up 17 per cent year on year, reflecting strong demand during the pandemic and a limited number of homes listed for sale.

Mortgage rates have also risen since plumbing record lows early this year, although they remain historically favourable for borrowers. The average rate on a 30-year loan was 3 per cent last week, compared with 2.65 per cent in the first week of January, according to Freddie Mac.

“Consumers are facing much higher home prices, rising mortgage rates and falling affordability; however, buyers are still actively in the market,” said Lawrence Yun, chief economist at the NAR.

“The sales for March would have been measurably higher, had there been more inventory.”

Demand was still robust last month. Properties typically remained on the market for 18 days, down from 20 days in February and 29 days a year earlier, according to the NAR. It said 83 per cent of homes sold in March were on the market for less than one month.

Overall, sales were up 12.3 per cent compared with March 2020, when coronavirus shutdowns began in the US.

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European bond markets strengthen following ECB decision

European bond markets strengthened after the European Central Bank held its policy in place, as the latest wave of Covid-19 sweeps across the continent.

The ECB on Thursday reaffirmed its determination to keep borrowing costs low in the eurozone, saying it would maintain its recently increased pace of bond purchases.

In response there was demand for German bunds, with yields moving 0.02 percentage points lower to minus 0.28 per cent. Italian government debt moved in tandem following a press conference by ECB president Christine Lagarde.

“In a limited fashion, we are breathing a sigh of relief that this meeting went well and that Lagarde didn’t rock the boat,” said Antoine Bouvet, senior rates strategist at ING. He said Lagarde avoided the “main communication trap” by refusing to be drawn on the future of the ECB’s faster asset purchases under its pandemic emergency purchase programme.

The ECB quickened the pace of purchases at its previous meeting in March to combat a rise in bond yields which the central bank warned could cause a “premature” rise in borrowing costs and stunt the bloc’s recovery.

Line chart of Yields on German Bunds have risen this year showing Bunds in 2021

Peter Schaffrick, chief European macro strategist at RBC, said the strengthening of haven bonds should be seen in the context of increasing risks from Covid-19 cases and mutations globally. “There are bigger fish to fry here,” he said.

“For the ECB, it will probably take a while before it really becomes interesting to markets again,” he added, noting that the future of the PEPP programme will need to be decided towards the end of the year.

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Sales at biggest luxury groups set to recover as early as this year

The luxury sector’s biggest groups are on track to shrug off the hit from Covid-19 as early as this year as eager shoppers in the US and China help push sales above pre-pandemic levels.

Hermès on Thursday blew past analyst forecasts with the highest industry growth so far, delivering first-quarter revenue of €2bn that was 33 per cent higher than the same period in 2019.

Sector leader LVMH had set the tone last week with first-quarter revenues up 8 per cent like for like from the same period in 2019 before the pandemic gored the global economy with lockdowns and travel curbs. The revival at Kering was less pronounced with a 5.5 per cent rise, as its star brand Gucci is in the middle of a makeover. 

While none of the groups give annual guidance, analysts forecast that revenues at all three this year will match or exceed those of 2019, according to Thomson Reuters Eikon data. LVMH and Hermès are also expected to report higher net profit than in 2019.

Shoppers queue outside a Hermes store in Mayfair in London © AP

Read more here.

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FT case tracker: infection numbers start to decline in the EU

There are early signs that the latest wave of Covid-19 infections in the EU may have peaked, with the number of new cases across the bloc as a whole declining over the past week according to the FT vaccine tracker.

In mid-April there were around 35 new cases per 100,000 people but that has declined to just under 30 cases this week as infections in Germany levelled out and there were slight declines in Italy and Spain.

Infection numbers in France and the Netherlands remain well above the EU average, however.

The spread of a third wave of infections in France triggered another nationwide lockdown, which included travel restrictions, school closures and an extension of a 7pm-6am curfew. French prime minister Jean Castex told parliament earlier this month that the number of recorded new cases in France had risen 55 per cent to about 38,000 a day.

In the Netherlands, the number of new cases is still rising. Daily cases fell in every age group in February, but began rising in March and April.

The government advised citizens to continue to follow guidelines on hygiene and social distancing: “If everyone follows the basic measures, even if you just tested negative for Covid-19 or have been vaccinated, then fewer people will be infected and it will be possible to relax the measures sooner.”

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US jobless claims fall to fresh pandemic-era low

Initial applications for unemployment benefits in the US have fallen to a pandemic-era low for a second straight week, the latest sign that the coronavirus vaccine rollout and relaxed restrictions are boosting the labour market.

The labour department recorded 547,000 initial jobless claims on a seasonally adjusted basis, down from 586,000 the previous week. Economists had expected an increase in weekly claims, to 617,000.

US hiring has picked up this year as states roll back restrictions on businesses and social activity, encouraged by a slowdown in coronavirus infections and the vaccination campaign.

The economy, which also received a boost from two rounds of fiscal stimulus since December, has now recovered almost two-thirds of the number of jobs lost during the pandemic. Employers added 916,000 jobs in March.

However, jobless claims remain above pre-pandemic levels. Before the pandemic struck, the labour department reported a little more than 200,000 claims each week.

The latest report showed that the number of Americans actively collecting state jobless aid fell from 3.71m to 3.67m in the week that ended on April 10. The insured unemployment rate edged down to 2.6 per cent from 2.7 per cent.

Another 133,319 people sought aid through the federal Pandemic Unemployment Assistance programme, which provides benefits to the self-employed and others who would not qualify for regular benefits. That reflected an increase of about 1,600 compared with a week earlier on an unadjusted basis.

All state and federal unemployment programmes had a combined 17.4m people claiming benefits, according to unadjusted figures that are reported on a two-week delay.

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Asset sales help Blackstone to record profit in first quarter

Blackstone has reported its largest ever quarterly profit, as the prospect of an economic recovery buoys asset markets already lifted by emergency government support.

The world’s biggest alternative asset manager reaped $8.1bn from asset sales in its private equity portfolio in the three months to March, helped by rising stock prices, a resurgent market for initial public offerings and the proliferation of blank-cheque acquisition companies.

UK fintech group Paysafe, which Blackstone acquired in 2017 alongside European rival CVC Capital Partners, completed a $9bn merger with a special-purpose acquisition company. Bumble, the online dating business that Blackstone bought in 2019, attained a valuation of $13bn in an initial public offering in February.

At the same time as it sold assets, Blackstone deployed $18bn in new investments. Roughly one-third of the total went towards investments in real estate, including 2.3m square feet of specialist office space in the booming life sciences district of Cambridge, Massachusetts.

The firm’s net income of $1.75bn in the first quarter marks an extraordinary turnround from the $1.07bn loss posted in the same period last year, as the economy shut down, credit markets seized up, and lenders braced for widespread defaults — especially among companies backed by private equity firms, which are typically more reliant on debt.

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PizzaExpress to hire 1,000 new staff as restaurants reopen

PizzaExpress is to recruit 1,000 new staff as it emerges after months of lockdown and a major financial restructuring that led it to close almost 100 restaurants.

Hospitality businesses across the UK are rushing to bring back furloughed employees and recruit new ones in anticipation of a bump in demand as lockdowns end. Many fear staff shortages as a result of workers who have left the industry.

PizzaExpress said that 300 of the 1,000 staff it hires would be supported by the government’s Kickstart scheme, which provides six months of funding to cover wages of new jobs for 16 to 24-year-olds.

The company made 2,400 staff redundant in 2020 as it underwent a financial restructuring, through which the chain changed ownership and cut a £1.1bn net debt pile.

Read more here

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American Airlines says ‘no doubt’ travel recovery is accelerating

American Airlines said it reduced its cash burn in the first quarter and sees demand recovering, which pushed shares up 3 per cent in early trade. 

The Texas-based airline, which is struggling from the impact of the Covid-19 pandemic, predicted capacity will be down between 20 to 25 per cent in the latest quarter from the second quarter of 2019 before the pandemic hit, the company said in a statement on Thursday.

American forecast a revenue decline of 40 per cent compared with the second quarter of 2019.

“The pandemic is far from over,” said chief executive Doug Parker. “We have to continue to fight like never before and ensure that, when the green flag drops, American is out in front.”

Parker added: “But as our world makes daily strides in Covid-19 vaccination efforts, customers are returning to travel and there is no doubt the pace of the recovery is accelerating.”

American previously said it expects air travel to rebound strongly over the summer, as an acceleration in vaccinations and easing coronavirus restrictions have spurred demand. It expects to fly over the summer months more than 90 per cent of its domestic seat capacity and 80 per cent internationally, as compared with 2019.

The airline plans to operate more than 150 new routes.

Revenues fell 53 per cent from a year ago to $4bn in the first quarter, in line with Wall Street expectations, according to a Refinitiv survey, and on the back of a 39 per cent reduction in capacity. 

American reported average cash burn of about $27m per day in the first quarter, compared with $30m the previous quarter. In March, the carrier burnt through about $4m a day on average, excluding about $8m of debt and severance payments. The rate turned positive last month, it said.

The carrier has incorporated more than $1.3bn in cost reductions into its plans for the year, including a voluntary buyout plan it launched in February that will result in the exit of 1,600 employees. 

American agreed with Boeing to defer and convert five 787-8 aircraft to 787-9 aircraft, with deliveries expected in 2023. Its remaining 14 787-8 aircraft will be delivered by the end of the first quarter of 2022.

American reported a net loss of $1.3bn or $1.97 share, compared with a loss of $2.2bn or $5.26 a share in the year ago quarter. Adjusting for one-time items the company reported a loss of $4.32 a share, compared with analyst expectations for a loss of $4.31 a share.

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Brit awards event to open doors to live audience as UK prepares to welcome crowds back

The UK’s Brit awards event, which highlights the pop industry, plans to welcome as many as 4,000 people next month for the first live music show at London’s O2 arena since coronavirus-related restrictions kept attendees away more than a year ago.

Organisers will offer 2,500 tickets to London-based frontline workers such as NHS staff for the May 11 show in a ballot on Thursday as the UK paves its way back to live events.

The show is part of a government scheme that aims to attract more attendees and test how to hold sport competitions, theatre shows and gigs safely and without social distancing or masks.

Billie Eilish picks up Brit award for international female solo artist in February 2020 © REUTERS

Local authorities and organisers will work with health authorities on the pilot events that will aim to encourage crowds safely back this summer.

The scheme, which will test specific settings, began last weekend with up to 1,000 people a day watching the world snooker championship indoors at the Crucible theatre in Sheffield, 300 in a comedy club in Liverpool and the Football Association Cup semi-final at Wembley with 4,000 people seated outdoors. Participants will be tested for Covid-19 before and after the events.

A live gig in Liverpool is expected to attract 5,000 on May 2 while a business conference and a cinema screening are planned in the city.

Evidence from the pilots will be used to shape government events policy in England on events.

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Singapore to tighten restrictions on India travel after migrant workers test positive

Singapore is to tighten restrictions on travellers from India and introduce tighter safety measures on migrant worker dormitories after several residents tested positive for coronavirus.

The number of new locally transmitted cases reported daily in Singapore had remained in the low single digits or zero for months. This week, however, 17 workers living in a dormitory tested positive.

Authorities are investigating whether the individuals, who had already recovered from Covid-19, had been reinfected or whether the positive tests had arisen because the virus was still present in their bodies. The workers’ dormitory blocks have been isolated.

A routine testing programme in dormitories is to be widened to include migrant workers who recovered from an initial infection more than 270 days ago. Testing and quarantine measures will also be tightened for newly arrived migrant workers.

Singapore is also reviewing border measures for travellers who have recovered from Covid-19 and is considering tighter isolation requirements, among other policies.

Most workers in the dormitory cluster work in the marine industry. While there is no proof this group is linked to the new Covid-19 strain in India, the heath ministry noted many travellers from India were employed by Singapore’s construction, marine and process sectors.

As of Saturday, all long-term residents and short-term visitors who have travelled or transited in India in the past 14 days will not be allowed to enter or transit through Singapore.

An ambulance carrying a migrant worker leaves a dormitory in Singapore on Thursday after residents test positive for coronavirus. © REUTERS
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ECB vows to persist with faster bond purchases to prop up recovery

The European Central Bank has reaffirmed its determination to keep borrowing costs low in the eurozone, saying it will maintain its recently increased pace of bond purchases until the bloc’s economy is firmly on the path to recovery.

The central bank kept its main policy measures unchanged on Thursday. In a statement released after the decision, policymakers said that “incoming information confirmed the joint assessment of financing conditions and the inflation outlook carried out at the March monetary policy meeting”.

Therefore, “the governing council expects purchases under the [pandemic emergency purchase programme] over the current quarter to continue to be conducted at a significantly higher pace than during the first months of the year”, the statement said.

The deposit rate remained at minus 0.5 per cent and the ECB reiterated its stance that its €1.85tn emergency bond-buying programme could be further expanded or not used in full, depending on its progress in stimulating a recovery in output and inflation.

The eurozone economy continues to suffer from the containment measures deployed to rein in the bloc’s high Covid-19 infection rates. But the pace of vaccinations has accelerated in many countries recently, fuelling economists’ hopes that restrictions may be eased next month, a move that many expect to trigger a strong rebound.

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Southwest predicts cash burn will end in June as leisure travel demand improves

Southwest Airlines expects to stop burning cash by June, with the US carrier predicting “the worst is behind us”, as vaccinations continue and leisure travel demand improves.

The Texas-based airline expects to burn through between $2m to $4m a day in the second quarter, from $13m a day in the first quarter, it said on Thursday.

Booking trends and its cost outlook have prompted the company to expect to “achieve breakeven average core cash flow, or better, by June 2021”.

“While the pandemic is not over, we believe the worst is behind us, in terms of the severity of the negative impact on travel demand,” said chief executive Gary Kelly.

Southwest has experienced steady weekly improvements in domestic leisure bookings, Kelly said, giving a nod to the increase in vaccinations and the decline in hospitalisations.

“We believe there is significant pent-up demand for leisure travel and are optimistic about summer 2021,” he said.

The upbeat commentary accompanied a nearly 52 per cent year-on-year drop in first-quarter revenues to $2.05bn, , just shy of Wall Street expectations, as the coronavirus pandemic hits travel demand.

Southwest reported net income of $116m or 19 cents a share, compared with a loss of $94m or 18 cents a share in the year ago quarter.

However, this was driven largely by payroll support from the federal government, excluding these benefits the company reported an adjusted loss of $1bn or $1.72 a share, better than analysts expectations for a loss of $1.85 a share.

Southwest shares have risen 33 per cent this year.

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Man involved in Olympic torch relay tests positive for Covid

A man has fallen ill with Covid-19 after he was involved in the Olympic torch relay in Kagawa in the south of Japan, highlighting the risk that the games will further spread infection.

The organising committee confirmed on Thursday that the individual in his 30s had tested positive. Japan is facing a renewed wave of coronavirus cases just three months before the rescheduled Olympics are due to start.

Case numbers have been rising since early last month, and there has been speculation in the country that the government will declare a state of emergency in some large cities, including Tokyo and Osaka.

The pace of vaccinations in Japan has been slow, with just 1.7 doses delivered per 100 people according to the FT’s vaccine tracker. That is well below the rates in the EU, US and China.

© AFP via Getty Images
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Norway to lend AstraZeneca vaccine shots to Sweden and Iceland

Norway is lending its entire stock of Oxford/AstraZeneca Covid-19 vaccines to Sweden and Iceland, after putting the jab on hold for a second month after four blood clot deaths.

A day after Denmark lent 55,000 AstraZeneca doses to the German border region of Schleswig-Holstein, Norway followed suit by giving 200,000 jabs to Sweden and 16,000 to Iceland, both of which are still using the vaccine.

Norway has set up an expert commission to advise on the future use of both the AstraZeneca and Johnson & Johnson vaccines. Its public health authority recommended taking the former out of its vaccine programme after four women under 54 died from the rare combination of blood clots and low level of platelets after taking the jab. It is due to report by May 10, while the 216,000 doses to be sent to other countries have expiry dates in June and July.

“I am happy that the vaccines we have in stock will be used even if the AstraZeneca vaccine is on pause in Norway. If the use of the AstraZeneca vaccine is resumed, we will get back the doses we lend out as soon as we ask for them,” said health minister Bent Hoie.

Sweden is in the middle of a third Covid-19 wave in which cases and hospitalisation, but not deaths, have surpassed the figures from the second wave this winter. It has helped Norway with vaccine supply from the EU.

“Sweden has a challenging infection situation and has provided extensive support to Norway in getting access to vaccines,” Hoie added.

Denmark, which has taken the AstraZeneca jab fully out of its vaccine programme, is trying to find another country to swap Pfizer/BioNTech vaccines for them, but in the meantime lent some of its stock to the German region bordering it.

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RSC reveals garden theatre plans as part of its efforts to lure theatre fans back

The Royal Shakespeare Company has unveiled its plans for a garden theatre at Stratford-upon-Avon as the group seeks to attract audiences back “with confidence” following coronavirus pandemic closures.

The Comedy of Errors will be the opening performance on July 13 at the proposed site that is overlooked by the Swan Theatre and flanked by the River Avon.

That Shakespeare play had been scheduled with The Winter’s Tale , which the company is adapting for screen with the BBC, for spring last year but coronavirus-induced restrictions closed UK theatres.

“By creating an outdoor theatre space for The Comedy of Errors we hope audiences will feel safe to return to the theatre with confidence,” RSC’s artistic director Gregory Doran.

“Our buildings will gradually come back to life during the summer through our café and restaurant,” he added, while the Royal Shakespeare Theatre will be ready for indoor performances in the autumn.

The Comedy of Errors will tour the UK, including The Marlowe Theatre in Canterbury in October, once its run at the Lydia & Manfred Gorvy Garden Theatre ends in September.

The RSC is introducing another pandemic-related innovation by inviting online audiences into its full rehearsal process for the first time in its history. 

Viewers will be able to log on daily for three weeks from early June to see actors, directors and the production crew working on Henry VI Part One, directed by Doran and Owen Horsley, before a complete rehearsal run-through on June 23.

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UK shoppers go on card-spending spree as stores reopen

Spending by card has risen in the UK to the highest level in four months to reflect the economy reopening and raising hopes consumers will boost growth at the start of the second quarter.

The value of credit and debit card purchases increased by 8 percentage points in the week to April 15, from the previous seven-day period, to 91 per cent of its February 2020 average.

This is the highest level since December, the Office for National Statistics figures showed on Thursday, even as the timespan only partly included non-essential businesses opening up again after a three-month lockdown lull.

Stores, outdoor hospitality venues including pub gardens, and many personal services, such as hairdressers and beauty salons, opened again in England on April 12.

The increase of card use was driven by a 26 percentage-point rise in spending on goods categorised as “delayable”, such as clothing and furnishings.

Work-related spending, which includes public transport or petrol, edged up by 3 percentage points while staple products, such as food and utilities, fell by 4 percentage points but remained above its February 2020 average.

The figures imply consumers are eager to spend again as businesses returned. Economists expect the UK economy to rebound in the second quarter as consumers release their pent-up demand.

The statistics body reported that the percentage of businesses trading increased to 77 per cent in mid-April, fom 71 per cent in early January.

Those experiencing a decrease in turnover, from normal expectations, dropped to 36 per cent in late March to early April, the lowest recorded since comparable estimates began in June last year, the ONS said.

Workers on furlough declined to 17 per cent in late March from 19 per cent in the middle of the month.

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Covid no longer leading cause of death in England and Wales

Coronavirus was the third leading cause of death in England and Wales in March, having been the biggest killer for four consecutive months, according to the Office for National Statistics.

Covid-19 accounted for 9.2 per cent of all deaths registered in England last month and 6.3 per cent in Wales, behind Alzheimer’s disease and heart disease.

The highest mortality rate in England was in the East Midlands, with 118.9 deaths per 100,000 people. The South West continued to have the lowest mortality rate, with 45.7 deaths per 100,000 people.

In a separate statement on Thursday, the ONS said there was evidence that the percentage of people testing positive for the disease “appears to have levelled off”.

Yet it said there had been a rise in the number of physical contacts that adults and school-age children had with those outside their household.

Sarah Crofts, senior statistician for the Covid-19 Infection Survey, said this was “not surprising” given that schools had reopened and lockdown restrictions had been eased.

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Egyptian pharma group to produce Russian vaccine

Russia’s sovereign wealth fund has signed a deal with Egyptian pharmaceutical group Minapharm to produce more than 40m doses a year of Russia’s Sputnik V coronavirus vaccine in the North African country.

The Russian Direct Investment Fund, which is managing Sputnik V’s international production and distribution, said on Thursday that technology transfer would begin immediately and vaccine production is expected to begin in the third quarter of 2021.


The vaccine doses will be manufactured at Minapharm’s facilities in Cairo and be distributed internationally, RDIF said in a statement, adding that this was Sputnik V’s first production agreement in the Middle East and North Africa region.

RDIF has banked on finding global partners to produce enough Sputnik V jabs to meet orders from 60 foreign countries that have approved the vaccine, with Russia’s limited vaccine production capacity instead focusing on domestic needs.

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Demand for disinfection services boosts Rentokil

Pest control and hygiene company Rentokil said that its first quarter revenues jumped by more than a third in North America, thanks partly to strong demand for one-time disinfection services.

In a trading update on Thursday, the company said that its overall revenues rose to £714m in the first three months of the year, up 13 per cent on the same period last year.

Rentokil said that trading conditions in the UK and other parts of the world had been severely impacted by lockdowns. However, these conditions are expected to improve significantly over the coming weeks, following progress in the UK's vaccination programme and the subsequent easing of lockdown restrictions.

Chief executive, Andy Ransom, said: “I am very pleased with the performance our colleagues delivered in Q1, in particular the growth momentum achieved by our pest control business,” adding that he remained “confident in delivering further operational and financial progress in 2021.”

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UK construction boom helps Morgan Sindall

Morgan Sindall has hiked its annual profit forecast, as the infrastructure group benefits from the recent rapid expansion in UK construction activity.

The FTSE 250 group, which builds everything from schools and town halls to housing, expects to be “significantly ahead” of estimates for 2021 given on February 25, as its construction order book jumped 10 per cent between the end of December and the end of March.

Trading has also been strong in its infrastructure business, and there has been an uptick in demand for its division that fits out the interiors of public and commercial buildings.

The profit upgrade reflected a reported uptick in purchasing activity for the construction sector in March, which suggested economic activity has been more robust during the latest lockdown than the first one a year ago.

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Domino’s UK serves up biggest sales rise since pandemic began

Domino’s, the UK pizza group, has posted its biggest rise in like-for-like sales since the pandemic began after Britons under lockdown ordered more takeaways.

A trading update on Thursday showed revenues at the company, the UK master franchisee of Domino’s US, leapt 18.7 per cent year-on-year to £371.3m in the first three months of 2021.

Trading over the new year period had been “exceptional”, the company said. It noted that the comparative period — the first quarter of 2020 — had been largely unaffected by Covid.

Deliveries had been particularly strong. While collection sales have been hurt by the coronavirus crisis, as consumers have been more inclined to stay at home, they recovered to 65 per cent of 2019 levels in the first quarter.

Domino’s initially closed most of its outlets during the first UK lockdown last spring, but subsequently reopened them as government guidance on food premises became clear.

Dominic Paul, chief executive, said in a statement: “The investments we are making to deliver our multi-year strategic plan give us confidence in our ability to capitalise on the opportunities which lie ahead.”

The company last month agreed terms to dispose of its Swedish and Icelandic businesses as part of a reorganisation under which it will pull out of continental Europe.

Domino’s paid £1.8m to dispose of the Swedish business and received around £13.7m in cash for Domino’s Iceland.

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Driving tests resume in England and Wales

Car driving tests in England and Wales resumed on Thursday after they were suspended in January when a rise in coronavirus infections prompted a third lockdown.

Other tests, such as lorry and motorbike driving, restarted on April 12 while bus tests began on March 29, the Driver and Vehicle Standards Agency said. Car drivers can begin to take tests in Scotland on May 6.

Lessons started up again on April 12 in England and Wales and will begin in Scotland on Monday.

Booking a test will require patience. Most centres are booked up for months and have a backlog of hundreds of thousands of tests.

A driving lesson takes place in a Portsmouth car park. Tests resumed on Thursday but slots are in short supply © Getty Images
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Informa loses £1.1bn after events cancelled due to pandemic

Informa, the world’s largest exhibitions business, lost £1.1bn before tax last year, as the pandemic forced it to cancel events and write down the value of its portfolio.

The FTSE 100 company on Thursday said it had taken a £593m impairment charge on several of its brands due to the “impact of Covid-19 on the long-term trading outlook for our physical events”.

Event cancellations prompted revenues to slip 43 per cent to £1.66bn in the year ending December. Adjusted profit before tax, which excluded Covid-related charges and costs, reached £170m, compared to £821m in the previous year.

Informa said 2021 would be a “transition year” for physical events as “permissions progressively return and B2B customer confidence rebuilds”. It forecast revenues of at least £1.7bn in the next financial year.

Stephen Carter, chief executive, said that the next year would be defined by growth in the company’s subscriptions-led businesses, which include an academic publishing arm, and a gradual reopening of physical events led by mainland China and North America.

The group said it had made cost savings of more than £600m in the past year.

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Coffee drinking at home drives Nestlé sales

A surge in home coffee drinking helped Nestlé increase sales faster than expected in the three months to March, as consumers snapped up Nespresso pods, Nescafe instant coffee and Starbucks-branded products.

The world’s largest foodmaker reported sales growth of 7.7 per cent, reported on an organic basis — which strips out the effects of acquisitions, divestitures and currency movements — in the quarter, above last year’s 4.3 per cent and much higher than the 3.3 per cent analysts had forecast.

The rise in the metric was propelled in part by a 17.1 per cent jump in sales of Nespresso products, along with higher sales of instant coffee and Starbucks-branded coffee sold in stores under a partnership agreed by chief executive Mark Schneider three years ago.

Strong sales of dairy products, helped by a vogue for home baking in the pandemic, and pet food, such as the Purina brand, also drove growth.

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Renault sales hit by global chip shortage

Renault’s first-quarter sales were hit by a global chip shortage and currency fluctuations while the French carmaker sought to stem the decline with higher prices and by pushing forward its most profitable models.

Revenues fell 1.1 per cent to €10bn as the company said its policy of raising prices tempered the decline caused by the coronavirus pandemic. The group is prioritising its most profitable vehicles in key markets beyond Europe, such as the Kiger SUV in India and the Dacia Duster in Russia.

Without currency changes, sales would have risen by 4.4 per cent, Renault said on Thursday.

The group warned of “rising headwinds” such as foreign exchange and raw material costs as well as “limited visibility due to electronic component shortages”.

Sales in the same period a year earlier — a quarter when the industry was forced to close its plants as European lockdowns came into force — fell to €10.1bn from €12.5bn in the first quarter of 2019.

The French carmaker is in the middle of a €3bn turnround plan under chief executive Luca de Meo, following €8bn of losses during 2020.

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Has the pandemic made Scotland's independence more likely?

Almost exactly a year ago, Nicola Sturgeon appeared on TV and promised Scottish voters “a grown-up conversation”. Scotland’s first minister admitted that lockdown had been hard, but said that there was no option but to continue to “suppress the virus”.

Even when lockdown was eventually lifted, a return to normal was not “on ­the cards”, the leader of the pro-independence Scottish National party argued with her usual forthright, ungilded delivery. Further lockdowns could be required. 

The contrast with Westminster was stark. Prime Minister Boris Johnson was not on TV: he had only recently left intensive care, having contracted coronavirus. Once back at work, he promised Britons a return to normality by the summer (and later by Christmas). Together with chancellor Rishi Sunak he erred on the side of reopening the economy.

Commentators soon bundled Sturgeon with New Zealand’s Jacinda Ardern and Germany’s Angela Merkel as leaders handling the crisis well, while Johnson was compared to US president Donald Trump. Sturgeon pointedly took no holidays; she fronted a lunchtime coronavirus briefing, which became daily viewing for many voters; she agreed, as early as May 2020, that there should one day be a public inquiry into “every aspect of this crisis”. 

Read more here

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India's health infrastructure unravelling as record 315,000 new cases reported

India reported a world record of 315,000 new coronavirus infections for Wednesday, surpassing the US peak earlier this year.

The milestone underscores the horrific unravelling of the country's health infrastructure this month, as a second wave caught authorities unprepared.

India reported 2,100 deaths on Wednesday, but the true toll of both fatalities and cases is likely vastly underreported.

Hospital beds and life-saving supplies of oxygen have run low in the hardest hit spots, leading to desperate queues of dying patients seeking treatment. On Wednesday more than 20 people died due to an oxygen leak at a hospital in western India.

The surge in dead bodies has so overwhelmed crematoriums and graveyards that authorities in the southern state of Karnataka have allowed individuals to cremate and bury their dead on private land.

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Covid-19 vaccine tracker

At least 934,663,051 doses of coronavirus vaccines have been administered around the world, data from 214 locations show.

Israel still leads with the highest number of vaccines delivered per 100 residents at 114 and around 55 per cent of its residents now fully vaccinated, according to the FT’s vaccine tracker.

Bahrain has unseated Chile as the country with the second-highest number of doses per 100 residents at 68.2 and almost 30 per cent of its population is now fully vaccinated.

A woman receives her jab at the Bahrain International Exhibition and Convention Centre in Manama © AFP via Getty Images

US President Joe Biden said on Wednesday that the country was on track to have small gatherings for Independence Day after more than 200m shots had been administered, or 64.4 doses per 100 people.

India, which is in the midst of a brutal resurgence in infections, has given 9.5 shots per 100 people. Singapore is well ahead of other Asian countries with almost 15 per cent of its population now fully vaccinated.

South Korean officials said on Thursday that the country was approaching 2m shots given, with its target of 3m doses by the end of the month looming.

Check out the FT visual and data journalism team’s vaccine tracker here 

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Exasperated Thais demand vaccine action from their government

Thailand’s prime minister won plaudits for steering the country successfully through the first year of the coronavirus pandemic. But as cases rise and the vaccine rollout falters, big business and ordinary Thais alike have unleashed their anger and frustration at the government.

The criticism has been stoked by the sharpest rise yet in infections in the kingdom, which medical experts have linked to the faster-spreading variant of the virus first identified in the UK.

Thailand’s plan to vaccinate up to 50 per cent of its 70m population this year, and 70 per cent by 2022, has until now been based almost entirely on a single vaccine: the Oxford/ AstraZeneca jab.

The kingdom has ordered 63m doses of the vaccine, most of which are being produced by local company Siam Bioscience, which is owned by billionaire King Maha Vajiralongkorn. However, the locally made AstraZeneca jabs will only be available from June. 

A Buddhist monk’s blood pressure is monitored after his vaccination at Bangkok’s Nak Prok temple © AP

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Coronavirus resurgence threatens recovery in Asia

A resurgence in coronavirus infections is threatening economic recovery in Asia, where vaccination levels in many countries remain low, according to economists. 

Capital Economics said rising infection numbers in India, Pakistan and parts of south-east Asia could derail early recoveries from the pandemic. 

It said India's second wave of infections had triggered new restrictions “adding downside risks to the economic outlook”. Countries in south-east Asia are also seeing upticks in infections, particularly the Philippines and Thailand, where vaccine rollouts have been slow. 

The Philippine government has a target of vaccinating 60 per cent of its population in 2021, but has only managed 1 per cent so far.

“Lasting damage from the pandemic is likely to be greatest in the Philippines,” Capital Economics economists said. “Failure to suppress infections has required restrictions to remain in place for longer than elsewhere in the region. And fiscal support has been inadequate.” 

It forecasts the country’s GDP will remain 7 per cent below its pre-pandemic level until the end of 2023.

China, Singapore and Hong Kong are the only countries and territories to have vaccinated more than 10 per cent of their populations, Capital Economics said.

However, border closures will limit the economic recovery in Singapore and Hong Kong, limiting the pace of recovery after most social distancing rules were relaxed in the two cities.

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Singapore records new infections at migrant worker dormitory

Singapore has reported 12 coronavirus cases at a migrant worker dormitory — the largest number of infections at the facilities in weeks. 

A 35-year-old man tested positive for the virus on Tuesday during a round of regular checks, prompting testing of his close contacts.

As a result, a further 11 people at the Westlite Woodlands Dormitory tested positive for the virus, the country’s Ministry for Manpower reported on Wednesday. 

Ten of the cases are being examined as possible reinfections as they were classed as “serology-positive”, meaning they had contracted the virus previously.

A migrant worker in Singapore chains the entrance to his dormitory following a stay-home notice © REUTERS

Singapore has managed to keep the number of cases in its general population comparatively low, with cases falling to the single digits in recent weeks. 

However, overcrowding at its migrant worker dormitories meant almost half of the 320,000 workers who live in the dwellings were estimated to have contracted the coronavirus, according to official figures released in December.

The workers did not appear in the Ministry of Health’s update on Wednesday, which recorded one case “in the community” and no new cases in migrant worker dormitories.

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UK companies in financial distress rise at fastest pace in 7 years

The number of companies in significant financial distress has risen at the fastest rate in more than seven years, sparking warnings that “the dam of zombie businesses could be about to break” when government Covid-19 support comes to an end in the summer. 

Almost 100,000 more businesses were found to be significantly distressed in the first three months of the year compared with the previous quarter, despite the ban on winding up petitions linked to Covid-related debts. 

More than 720,000 businesses are now in significant financial distress, according to data from insolvency company Begbies Traynor, which said the 15 per cent rise from the previous quarter was the largest increase since its research began in 2014. 

Begbies Traynor found that companies in financial difficulty spanned all 22 sectors analysed by its research, highlighting a broad and deteriorating financial situation as the UK starts to exit from the economic lockdown. 

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Ryanair chief predicts full recovery for business travel

Ryanair’s boss Michael O’Leary expects business travel to make a full recovery from the pandemic, marking him out as one of the most optimistic figures over the future of a lucrative part of the industry that has been wiped out over the past year. 

O’Leary said he expected corporate travel to return to pre-Covid levels by 2022 unless the pandemic unexpectedly worsened and vaccines did not allow people to travel freely again. 

“All of these predictions business travel is dead . . . they generally always prove to be wrong,” he told the Financial Times’s Due Diligence Forum on Wednesday. 

His confidence stands in contrast to several other figures within the airline industry, who have warned that the successful adoption of video conference technology such as Zoom means the business travel segment will take a long-term hit from the pandemic.

“All of these predictions business travel is dead . . . they generally always prove to be wrong” © AFP via Getty Images

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Greece pushes ahead with plan to open up to foreign tourists

Greece will push ahead with a plan to open the country to foreign tourists on May 15, even as infection numbers and hospitalisations remain persistently high.

“The vaccines, the self-tests, and the better weather make us confident that this unprecedented adventure is ending,” Prime Minister Kyriakos Mitsotakis said on Wednesday in a special television address.

Opening up tourism, which accounts for 25 percent of Greece’s gross domestic product, is regarded as a critical step in reviving the country’s hard-hit economy.

The government also said residents aged 30 to 39 will be eligible for vaccination next week. The unexpected decision was spurred along by a surplus of AstraZeneca jabs left unused because of vaccine hesitancy by older citizens.

Mitsotakis stressed the importance of vaccinations and laid out a road map for the following weeks. Residents will not be allowed to travel within the country over the Orthodox Easter break next week because the largest outbreaks are occurring in large cities. “We cannot just think of our Easter holidays and not consider the health of people living in islands and villages,” he said.

After being closed for almost five months, restaurants will be allowed to reopen their terraces on May 3, while those working in the sector will have to take mandatory self-tests. Schools will reopen the following week, with students, teachers, and all staff also expected to conduct self-tests.

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Scientists warn of challenges to find antiviral pill to treat Covid

The search for a pill to protect people from the effects of Covid-19 is confounding scientists, suggesting the UK government’s decision to set an autumn target for finding two effective antiviral drugs will be difficult to meet. 

Experts have welcomed the government’s new task force to speed up the search with investment in a neglected but vital area of pharmaceuticals. But many are not yet convinced that the drugs in development could be used to treat patients within a few months.

Steve Bates, chief executive of the BioIndustry Association, who was closely involved with creating the vaccines task force, on which the new drive to find antivirals has been modelled, suggested the ventures were different but carried similarly high levels of risk. 

“It's like comparing reaching the North Pole to climbing Everest,” he said. However, the clear objective “to have at least two effective treatments this year, either in tablet or capsule form . . . is really good because it's really clear,” he added.

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Turkey reports its deadliest day of the pandemic

Turkey recorded the highest number of deaths in a single day since the start of the coronavirus pandemic during what public health officials have said is the country’s third wave of the outbreak.

The health ministry on Wednesday reported 362 fatalities and nearly 62,000 new coronavirus infections over the past 24 hours. Turkey has the world’s second-highest number of new cases after India.

Officials have blamed new variants of the virus for the high infection rate. The health minister said this week intensive care units at hospitals in Istanbul, the country’s biggest city that accounts for about 40 per cent of cases, are almost at two-thirds of their capacity.

The surge comes as Turkey expanded its vaccination programme this week to include people aged 55 and up. But the Turkish Medical Association, the largest professional group for doctors, said appointments are difficult to obtain “because it is obvious there is not enough vaccines at hand”.

Some 20.6m vaccine doses have been administered since mid-January, but just under 10 per cent of the population has received both doses, according to health ministry figures.

President Recep Tayyip Erdogan has sought to avoid full lockdowns to protect the $717bn economy but last week shut restaurants, ended most in-person school classes and extended night time and weekend curfews.

In an attempt to keep its tourism industry afloat, foreign visitors are exempt from the curfew. The US state department raised its travel advisory for Turkey and about 100 other countries to “do not travel” because of the severity of the outbreak.

The interior minister, who oversees the police force, said this week he would show “no compassion” and cancel the residence permits of foreign nationals living in Turkey who break the curfew by pretending to be tourists. Turkish citizens caught violating the curfew will be fined about $360.

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News you might have missed …

The Swiss government has said that electronic Covid-19 vaccination certificates are likely to be an integral part of plans to fully reopen the Swiss economy and allow people back indoors into cafés and restaurants, as it pushed back plans for a further easing of restrictions to late May. 

India’s Covaxin Covid-19 vaccine is 78 per cent effective and works well against most variants of the virus, according to interim data. The jab, developed by Bharat Biotech in Hyderabad in conjunction with the National Institute of Virology, was also found to be 100 per cent effective at preventing severe cases of the disease.

Canada’s central bank has cut back its bond buying programme and brought forward its projections for when it will meet its inflation targets in response to a brighter economic outlook despite a “temporary” setback from a severe third wave of Covid-19 infections. 

The US health agency has found evidence of poor quality and safety practices at a manufacturing site where doses of Johnson & Johnson’s vaccine are produced. The US Food and Drug Administration made nine observations about failures by Emergent BioSolutions, the company that runs the plant in Baltimore, including unclean buildings and poor controls to prevent cross-contamination.

Israel could divert a batch of vaccine doses from AstraZeneca that it no longer needs since its jab campaign has been such a success, its coronavirus co-ordinator has said. The order of 10m vaccines from the British-Swedish pharmaceutical company could instead be sent to other countries.

An ultra-orthodox Jewish man walks on a Tel Aviv beach after Israel’s recent announcement that masks are no longer required outside © AFP via Getty Images
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