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Hong Kong's economic woes deepen with plunging business outlook

Published

5 years ago

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Hong Kong’s economic woes showed no sign of easing Wednesday after a key measure of business confidence fell to its lowest level in more than a decade as the city reels from the global trade war and violent democracy protests.
The Purchasing Managers Index — which measures the health of the private sector — dropped to 39.3 in October, its worst reading since 2008 during the global financial crisis, heaping fresh misery on the unrest-plagued city.
The international finance has been plunged into a recession by the fallout from the China-US trade war and five months of seething pro-democracy protests that Beijing has taken a hardline approach against.
IHS Markit, which surveys around 400 private companies to build the PMI dataset, said business activity was now falling at its fastest rate on record. The latest reading is well below the 50 level that separates growth from contraction and is also sharply down from the 41.5 seen in September.
“The ongoing political unrest and impact of trade tensions saw business activity fall at the sharpest pace since the survey started over 21 years ago,” Bernard Aw, principal economist at IHS Markit, wrote.
“Anecdotal evidence revealed that the retail and tourism sectors remained particularly affected.”
Aw added the city was experiencing a record decline in demand from mainland China.
Hong Kong’s economy was already facing strong headwinds at the start of 2019 as it was hit by the trade war, battering a city that is hugely reliant on the world’s two largest economies.
In the first quarter the city was growing at a lacklustre 0.6 percent.
But the protests that erupted in June only made matters worse.
Figures released by the government last week showed gross domestic product shrank 3.2 percent in the third quarter compared with the previous three months, when it saw a 0.4 percent drop.
That means the city is experiencing a technical recession, with two back-to-back periods of contraction.
It is the first time the city has witnessed a recession since early 2009 at the height of the financial crisis.
Last month Financial Secretary Paul Chan warned it was “very likely” the city would end the year in a full-blown recession.
Overseas visitors have fallen by as much as 40 percent, especially from mainland China, which accounts for 80 percent of the city’s tourists.
Retail figures have tumbled around a fifth for August and September.
This summer’s protests were initially sparked by a now-abandoned plan to allow extraditions to the mainland with millions hitting the streets.
As Beijing and local leaders dug in the protests snowballed into a wider movement calling for greater democracy and police accountability with violence by both protesters and police increasing with each passing month.
Beijing appears determined to wait out protests, despite 22 consecutive weeks of rallies, and has signalled it plans to assert more control over the restless city rather than give concessions.
– AFP

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Asia

Up to 200 athletes tested for doping so far at Asian Games

Between 150 and 200 Asian Games athletes tested for doping, yielding no positive results. Anti-doping efforts emphasized for a clean event, focusing on record-breakers.

Published

1 year ago

on

25 September 2023

By

HANGZHOU, CHINA — Between 150 and 200 Asian Games athletes have already been tested for doping, the Olympic Council of Asia said on Monday, with no positive results so far.

Speaking at an anti-doping press conference on the second full day of the Games in the Chinese city of Hangzhou, the OCA said dope-testing was “gaining momentum” at the event.

Mani Jegathesan, an adviser to the OCA anti-doping committee, warned that drug cheats would be rooted out.

Up to 200 athletes have been tested so far, he said, but any positive results will take several days to come through.

“Every athlete participating in these Games must understand that they could be picked at any time,” Jegathesan warned.

“That is the best step to ensuring we have a clean event.”

There are about 12,000 athletes at the 19th Asian Games, more competitors than the Olympics, and Jegathesan admitted it would be impossible to test them all.

Instead, they will prioritise, including picking out those who break world or Asian records.

— AFP

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Asia

Foodpanda’s restructuring amid sale speculations

Food delivery giant Foodpanda, a subsidiary of Delivery Hero, announces staff layoffs in the Asia-Pacific region, aiming for increased efficiency. This move coincides with ongoing talks about potentially selling parts of its 11-year-old business.

Published

1 year ago

on

24 September 2023

By

Foodpanda, a subsidiary of Delivery Hero, is initiating undisclosed staff reductions in the Asia-Pacific region, as discussions continue regarding the potential sale of a portion of its 11-year-old food delivery business.

In a memorandum circulated to employees on 21 September, Foodpanda CEO Jakob Angele conveyed the company’s intent to become more streamlined, efficient, and agile.

Although the exact number of affected employees was not disclosed, the emphasis was on enhancing operational efficiency for the future.

No mention was made in the memo regarding the reports of Foodpanda’s potential sale in Singapore and six other Southeast Asian markets, possibly to Grab or other interested buyers.

Foodpanda had previously conducted staff layoffs in February and September 2022. These actions come as the company faces mounting pressure to achieve profitability, particularly in challenging economic conditions.

The regulatory filings of Foodpanda’s Singapore entity for the fiscal year 2022, ending on 31 Dec, indicated a loss of S$42.7 million despite generating revenue of S$256.7 million.

Angele further explained that Foodpanda intends to review its organizational structure, including both regional and country teams, with some reporting lines being reassigned to different leaders. Additionally, certain functions will be consolidated into regional teams.

Expressing regret over the challenging decisions, Angele assured affected employees of a severance package, paid gardening leave, and extended medical insurance coverage where feasible.

Foodpanda will also forego the usual waiting period for long-term incentive plan grants, and vesting will continue until the last employment date. Employees will retain all vested shares as of their last day of employment.

Foodpanda, established in 2012 and headquartered in Singapore, became a part of Delivery Hero in 2016. The company operates in 11 markets across the Asia-Pacific region, excluding its exit from the Japanese market last year.

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