By Sheila Dang for Reuters / IOL

Forbes’ annual world’s billionaires list includes a record-breaking 2,755 billionaires, with Amazon.com founder Jeff Bezos topping it for the fourth consecutive year, the media company said on Tuesday.

The ranks of the ultra-wealthy are expanding after a year in which the coronavirus pandemic upended world economies and threatened the livelihoods of people across the globe.

This year’s billionaires are worth a combined $13.1 trillion (R190.08 trillion), up from $8 trillion last year, Forbes said.

“The very, very rich got very, very richer,” said Forbes’ chief content officer Randall Lane, in an interview with Reuters Video News.

Tesla Chief Executive Elon Musk jumped into second spot on the list, up from 31st last year.

Bernard Arnault, chief executive of luxury goods firm LVMH, Microsoft founder Bill Gates and Facebook Chief Executive Mark Zuckerberg round out the top five of the world’s richest billionaires.

Investor and business tycoon Warren Buffett fell out of the top five for the first time in over two decades, as tech executives dominate the Forbes rankings.

This year’s list has 493 newcomers, including Whitney Wolfe Herd, chief executive of dating app Bumble, which went public this year.

The 10 most wealthy people in the world are:

  1. Jeff Bezos
  2. Elon Musk
  3. Bernard Arnault
  4. Bill Gates
  5. Mark Zuckerberg
  6. Warren Buffet
  7. Larry Ellison
  8. Larry Page
  9. Sergey Brin
  10. Mukesh Ambani

By Patrik Schowitz for South China Morning Post

Buoyant stock markets are ignoring near-term warning signals on the pandemic resurgence and instead focusing on upbeat Covid-19 vaccine expectations. While financial markets’ resilience has been remarkable in the short run, what about the long-run, real-world economic legacy of the pandemic?

Most important, perhaps, is how much the pandemic has carved into long-term economic growth. The main worry concerns so-called economic scarring or constraining future growth potential.

For instance, this could mean households and firms emerging from the pandemic are more cautious in their spending and consumption behaviour as well as possibly loaded down with debt. As a result, they will be prone to saving more and investing less. Further, some sectors of the economy hit hard by the pandemic may never fully recover with, for example, a good chunk of business travel likely forever replaced by video meetings.

Workers who lost their jobs in those hard-hit areas may take a long time to find new careers, and their livelihoods might be permanently damaged. Even workers in other economic areas might become less employable over time if they remain unemployed for too long.

Set against these negatives, there is the potentially positive impact of more rapid adoption of technological advances. The same video-calling technology hurting the travel business is making many peoples’ working lives more efficient, allowing them to collaborate remotely and do more work in a given day.

Further, a huge amount of stimulus was thrown at economies by central banks through rate cuts and asset purchases as well as by governments through monetary support to affected businesses and workers.

Together, these are speeding up economic recoveries compared to past recessions. This should help keep scarring to a minimum, although it’s too early to tell what the net impact of these factors will be.

Another area of concern is inflation. In the near to medium term, the risk of higher inflation seems contained. The many factors that have pushed inflation down during the last few decades will still be in play in the next three to five years.

These include rapidly advancing technology adoption in e-commerce and working from home pushing down prices, the retirement of ageing populations weighing on consumer demand and a large amount of spare economic capacity around the globe pushing down on wages.

However, look slightly further out and the balance of risks could shift. Rapid technological progress might be here to stay, but globalisation – another factor pushing down on prices – could well have peaked already.

The worst of the demographic trends will at some point be behind us, and economic slack might increasingly disappear in the face of continued economic stimulus to keep economies going in the post-pandemic world. This continued stimulus carries at least the risk of a rise in inflation if governments and central banks increasingly act in a coordinated fashion to try and deal with an elevated debt load.

There is another lasting legacy of Covid-19: a drastically increased debt load across both public and private sectors around the world. As a result of governments’ spending to support their economies, net government debt is set to rise to nearly 100 per cent of GDP in 2021 for the Group of 20 economies, from less than 80 per cent before the pandemic.

Similarly, private companies, which had already been running up debt loads during the last cycle, in many cases have had to take on more debt to survive.

The good news is that this has so far not led to further problems in funding markets, once central banks brought the initial panic during February and March under control. Still, the new high-debt reality will increase economies’ sensitivity to rising interest rates going forward, which is exactly why policymakers will be reluctant to let them rise too quickly or too soon.

Until fairly recently, economic orthodoxy held that high debt levels in and of themselves were a serious headwind for economic growth, related to the scarring argument above. This view is increasingly being challenged by economists, but it is hard not to be apprehensive about the impact on growth and inflation from here.

Even as the near-term path out of the Covid-19 crisis is materialising with the arrival of vaccines, the jury is still out on the longer-term consequences of the pandemic.

3M to cut 3 000 jobs

By Martin Baccardax for The Street

3M has said that it will eliminate around 2 900 jobs next year, while pulling back on investments in slower-growth markets, as part of an overall cost-cutting plant that will cost around $300-million.

3M said the updated restructuring plans, which were first launched in January, will affect all of its business divisions and geographies include a pre-tax charge of between $250 to $300 million, around $150 million of which will be taken in the current quarter. The moves will likely result in annual pre-tax savings of between $200 million to $250 million each year, 3M said, as it re-positions its global operations in the wake of the global coronavirus pandemic.

3M will detail the restructuring plans at an industry conference hosted by Credit Suisse later today, with CEO Mike Roman scheduled to speak at 8:10 Eastern time.

“The COVID-19 pandemic has advanced the pace of change and disrupted end markets around the world, increasing the need for companies to adapt faster,” Roman said.

“At the same time, we are seeing significant opportunities from our new operating model which we launched at the start of the year. As a result, we are taking further actions to streamline our operations, positioning us to deliver greater growth and productivity as global markets emerge from the pandemic.”

3M shares were marked 0.23% lower in early trading Thursday to change hands at $171.50 each to clip their six-month gain to around 6.5%, well shy of the 13.6% gain for the Dow Jones Industrial Average benchmark.

Last month, 3M posted modestly slower-than-expected October sale growth figures Friday, suggesting a potentially sluggish start to the fourth quarter for the industrial group.

3M said October sales rose 3% from last year to $2.9 billion as healthcare revenues rose 12%, offsetting a 4% decline in transportation and electronics. Safety and industrial sales rose 4% while consumer sales were 7% higher, 3M said, compared to respective gains of 6% and 3% in August.

3M had forecast “flat to low single digit” October sales growth during its third quarter earnings conference call with investors last month, but declined to provide profit or revenue guidance for the final three months of the year owning to broader economic and demand uncertainty linked to the coronavirus pandemic.

 

By Jon Porter for The Verge

Amazon says it has just had its “biggest holiday season to date” as customers turned to the site to shop rather than venturing out to physical stores.

Although CNBC notes that the company did not share actual sales figures for either Black Friday or Cyber Monday, in a blog post the company revealed figures for independent sellers on its platform.

Amazon says these sellers saw over $4.8 billion in sales through the two shopping days worldwide, an increase of 60 percent over last year.

“Through Cyber Monday, 2020 has been the largest holiday shopping season so far in our company’s history thanks to customers around the world,” Amazon wrote.

While Amazon’s sales reached record highs, traffic at physical stores has reportedly plummeted. Preliminary data from Sensormatic Solutions reported by CNBC said that in-store traffic fell by 52.1 percent this Black Friday compared with 2019, as customers stayed home to avoid the crowds. If current trends continue, 42 cents of every dollar spent this holiday season could go to Amazon, according to one analysis, up from 36 cents last year.

Amazon says 71,000 small- and medium-sized businesses worldwide surpassed $100,000 in sales so far this holiday season. But Amazon’s own brands also appear to have sold gangbusters.

The company says customers bought “more Ring, Blink, and eero devices on Amazon than during any previous holiday shopping weekend.” The company adds that other top-selling devices on Black Friday and Cyber Monday include its new Echo Dot and Fire TV Stick 4K.

Other top-sellers in the US over the holiday season include Barack Obama’s book, A Promised Land; a Revlon hair dryer and volumiser hot air brush; and a genetic DNA test ancestry kit from 23andMe.

Over the course of this year, Amazon has been one of the biggest beneficiaries of changing shopping habits due to the pandemic. In its last earnings release, the company reported that its net income nearly tripled in the quarter compared to the previous year, and that’s not including its Prime Day sale that had to be delayed this year.

This growth has fuelled a massive hiring spree at the company, The New York Times reports, with Amazon adding 427,300 employees to its global workforce over the course of ten months.

 

UK retail giants collapse

By David Meyer for Fortune

Just as the coronavirus pandemic forced big U.S. retail names such as J.C. Penney and Neiman Marcus into bankruptcy, it is now wreaking similar havoc in the U.K.

On Tuesday, the Debenhams department store chain collapsed, possibly spelling the end of a business that has been running for nearly two and a half centuries. The implosion was the indirect result of the collapse, one day previously, of Topshop owner Arcadia Group.

In total, around 25 000 jobs are now at risk.

Cascading collapse
Arcadia Group, whose other properties include high-street staples such as Dorothy Perkins and Miss Selfridge, went into a form of bankruptcy protection on Monday following the reported failure of emergency financing talks.

The fashion empire, run for the last 18 years by the flamboyant and controversial magnate Philip Green, is not laying people off immediately, but 13 000 jobs hang in the balance, particularly if no buyers can be found for its businesses.

“The impact of the Covid-19 pandemic, including the forced closure of our stores for prolonged periods, has severely impacted on trading across all of our brands,” said CEO Ian Grabiner in a statement.

That first domino then pushed over Debenhams, which was also on the brink.

The sportswear retailer JD Sports had been in talks to rescue the venerable chain, which had been looking for a buyer since going into administration in April. But, as Arcadia’s businesses were the biggest concession operators in Debenhams’ department stores, JD Sports took Monday’s news as its exit cue.

“The sale process has not resulted in a deliverable proposal,” Debenhams said in a Tuesday statement.

“Given the current trading environment and the likely prolonged effects of the COVID-19 pandemic, the outlook for a restructured operation is highly uncertain. The administrators have therefore regretfully concluded that they should commence a wind-down of Debenhams UK, whilst continuing to seek offers for all or parts of the business.”

The U.K. is due to leave its second national lockdown period Wednesday, moving instead to a tiered system of regional restrictions that will allow non-essential shops to reopen. Debenhams will reportedly use the “Wild Wednesday” opportunity for a fire-sale of its stock.

Arcadia post-mortem
The difficulties of the department-store model in the age of e-commerce are by now well-known, with COVID-19 in many cases being the straw that broke the camel’s back. Arcadia is also seen as a victim of existing weaknesses, such as its positioning in a time of widening income inequality, as well as the pandemic.

“Most of the brands under Arcadia Group, especially Topshop, sit in the mid-range for price points,” said Melissa Minkow, retail industry lead at digital consultancy CI&T, in an emailed statement.

“We’ve seen mid-priced retailers struggle across the board because of the massive rift between low- and high-income groups. As the middle-income demographic shrinks, so does the success of mid-range retail. On a similar note, Arcadia Group’s brands’ failure to identify with either fast fashion or more quality, high-end messaging means a failure to connect with consumers at a values-based level.”

The news of the collapses prompted words of sympathy from leading politicians.

Alok Sharma, the business secretary, tweeted Monday evening that the Arcadia collapse was “incredibly sad news” and the government “stands ready to support those affected during this difficult period.” The next morning, shadow business secretary Ed Miliband—a former leader of the Labour Party—responded to the combined Arcadia and Debenhams news by decrying “a devastating day for the high street.”

Miliband went on to urge the government to “press Philip Green to do the right thing for his employees’ pensions.” Arcadia’s pension scheme is reportedly £350million ($466 million) in the red.

Green and his wife Tina Green (the actual owner of Arcadia, via her Taveta Investments vehicle) are controversial figures for many reasons.

High on the list is their lavish, Monaco-based lifestyle—they have a £100 million ($134 million) super-yacht moored in the tax haven—but Philip Green has also been accused of of sexual and racial harassment, and a parliamentary report in 2016 described him as the “unacceptable face of capitalism” over his role in the collapse of the BHS retail chain, which he sold the year before for just £1.

 

Pfizer leads vaccine race

Source: eNCA

A vaccine jointly developed by Pfizer and BioNTech was 90 percent effective in preventing COVID-19 infections in ongoing Phase 3 trials, the companies announced Monday.

Protection in patients was achieved seven days after the second of two doses, and 28 days after the first, according to preliminary findings.

“The first set of results from our Phase 3 COVID-19 vaccine trial provides the initial evidence of our vaccine’s ability to prevent COVID-19,” Pfizer Chairman and CEO Albert Bourla said in a statement.

“We are a significant step closer to providing people around the world with a much-needed breakthrough to help bring an end to this global health crisis.

“We are reaching this critical milestone in our vaccine development program at a time when the world needs it most,” Bourla added.

Across much of the globe, COVID-19 infections rates are soaring to record highs, with hospital intensive care units filling up and death tolls mounting as well.

Based on supply projections, the companies said they expect to supply up to 50-million vaccine doses globally in 2020, and up to 1.3-billion doses in 2021.

 

Kids’ stationery booms during pandemic

By Jennifer Alsever for Marker

Christy Warner, a communications manager in Minneapolis, searched for months for a desk that fit her teenage daughter’s room and was priced less than $200. “I looked on Ikea, Wayfair, Overstocked, Target, TJ Maxx, everywhere, and everything is sold out,” she says.

Last spring, her daughter, a high school senior, converted the dining room table into a working desk during lockdown. Today, she’s upgraded to a folding table in her bedroom. “I just couldn’t find something,” says Warner. “It’s just like the toilet paper shortage.”

Covid-19 has created a whiplash cycle of unexpected product surges and shortages, from bicycles and pools, to flour and outdoor heaters. The latest unexpected pandemic rush: children’s office supplies. Call it the most expensive back-to-school year yet. As schools continue toggling between remote and hybrid learning, parents have been throttled into spending hundreds and sometimes thousands of dollars to set up makeshift home classrooms for their children — from first-graders to marooned college students.

Some companies are cashing in on the boom by launching new products to cater to what’s essentially a new breed of kid’s home office.

Forget backpacks and lunchboxes — according to Wayfair, sales of student desks are up 129%; meanwhile sales of Chromebooks, a popular no-frills laptop for students, have surged in the past few months.

“It’s a totally different set of things that are needed for back to school,” says Ben Arnold, a consumer technology analyst at research firm NPD. For instance, sales of notebook computers jumped 46% between July and August, compared to the same time during 2019, according to NPD. There was a similar lift in sales of USB webcams (174%), PC headsets (109%), monitors (78%), computer mice, (70%) routers (60%), and keyboards (40%). Parents are also snapping up more specialised gadgets to modify their setups, including green screens and ring lights — which improve lighting for Zooming into school, says Arnold.

Headphones have also been selling out. In Carlsbad, California, back-to-school sales at JLab Audio, an online audio retailer, have doubled, driven by parents snapping up $29 kids’ Bluetooth headphones that offer a smaller fit for either distance learning or “keeping kids occupied during lockdown,” says JLab CEO Win Cramer.

Another unexpected back-to-school hit: children’s blue light glasses, designed to protect little eyes from prolonged exposure to the harsh glow of computer screens and electronics.

Some companies are cashing in on the boom by launching new products to cater to what’s essentially a new breed of kid’s home office. Annex, an on-demand service that outfits home offices for employees, has been bombarded with inquiries from parents who want to set up workspaces for their children — so many that Annex has a kid’s cubicle in product development, says Rob Wu, a spokesman for the company.

Meanwhile, McSquares, a Colorado-based office supply startup that recently raised funding on Shark Tank, has begun offering $50 “distance learning packages” which include erasable markers, a desktop whiteboard that can replace scratch paper, and a six-pack of erasable sticky notes, which let students jot down their thoughts and rearrange them on the wall.

“There are great things we shouldn’t be doing in front of a screen, and one of them is thinking visually,” says McSquares’s founder and CEO Anthony Franco, who has seen quarterly sales top $1 million, up 500% over the last year, thanks in part to demand for Covid home offices.

Even companies that typically sell to school districts are suddenly finding themselves in the mass consumer game. Cincinnati-based School Outfitters, which sells school furniture and supplies to districts, has been selling parents bouncy and wobble chairs that let kids move around while sitting, along with kid-size standing desks. The pandemic hurt the company’s sales in March and April, says CEO Tom Brennan, but it has since bounced back with a new revenue stream — “regular parents.” Adds Brennan: “It’s not really our market, but we’re happy to help them.”

Paperworld 2021 delayed

By Matthew Kramer for Home Business World

As a result of the pandemic, Messe Frankfurt will not be holding any of its own physical trade fairs at the Frankfurt exhibition grounds between January and March 2021. The company is revamping its spring trade fair calendar to focus on new synergies and new digital offerings, and will move Ambiente to April 17 to 20, 2021.

From April 17 to 20, 2021, the Ambiente, Christmasworld and Paperworld shows will be making a once-only appearance as a joint event in Frankfurt: the International Consumer Goods Show – Special Edition. The physical event will be actively supplemented with digital offerings as part of Consumer Goods Digital Days, which will also be home to the purely digital Creativeworld, an event that is taking a one-year hiatus as a physical meeting place in 2021.

The company noted that it has already organised 13 large trade fairs at various locations in China since the crisis began. However, now that it is not only governments tightening travel restrictions, but also companies, the latest pandemic developments are causing growing uncertainty amongst trade fair customers.

Wolfgang Marzin, president and CEO of Messe Frankfurt, said, “It is important for our customers that we make a decision at an early date, as it would otherwise be time for them to begin investing in their trade fair presentations. Messe Frankfurt will continue working closely with its customers to ensure that its decisions serve the interests of the exhibiting industries.”

 

Source: Reuters / IOL

President Vladimir Putin said on Tuesday that Russia had become the first country in the world to grant regulatory approval to a Covid-19 vaccine after less than two months of human testing, a move hailed by Moscow as evidence of its scientific prowess.

The development paves the way for the mass inoculation of the Russian population, even as the final stage of clinical trials to test safety and efficacy continue.

The speed at which Russia is moving to roll out its vaccine highlights its determination to win the global race for an effective product, but has stirred concerns that it may be putting national prestige before sound science and safety.

Speaking at a government meeting on state television, Putin said the vaccine, developed by Moscow’s Gamaleya Institute, was safe and that it had even been administered to one of his daughters.

“I know that it works quite effectively, forms strong immunity, and I repeat, it has passed all the needed checks,” said Putin.

He said he hoped the country would soon start mass producing the vaccine.

Its approval by the health ministry foreshadows the start of a larger trial involving thousands of participants, commonly known as a Phase III trial.

Such trials, which require a certain rate of participants catching the virus to observe the vaccine’s effect, are normally considered essential precursors for a vaccine to receive regulatory approval.

Regulators around the world have insisted that the rush to develop Covid-19 vaccines will not compromise safety. But recent surveys show growing public distrust in governments’ efforts to rapidly produce such a vaccine.

Russian health workers treating Covid-19 patients will be offered the chance of volunteering to be vaccinated soon after the vaccine’s approval, a source told Reuters last month.

More than 100 possible vaccines are being developed around the world to try to stop the Covid-19 pandemic. At least four are in final Phase III human trials, according to WHO data.

By Anneken Tappe for CNN

The Covid-19 pandemic and subsequent lockdown measures have thrown the world economy in turmoil. Even as countries are reopening, the World Bank predicts this year, the globe will have its deepest global recession in 80 years.

The pandemic, which has infected some seven million people worldwide, led countries to order citizens to stay at home and business to grind to a halt.

Worldwide gross domestic product — the broadest measure of economic growth — will contract 5.2% in 2020, according to a report by the World Bank. That’s despite the unprecedented fiscal and monetary policy support governments around the world have been rolling out. Trillions of dollars have been deployed to help companies stay in business, keep cash in consumers wallets and let financial markets function properly.

Still, advanced economies, such as the United States or Europe, are projected to shrink by 7%. America’s economy is expected to contract by 6.1% before rebounding in 2021.
This quarter will almost certainly be the worst for the Western world, but most of Asia felt the brunt of the outbreak in the first months of the year.

China, the world’s second largest economy, is projected to grow 1% this year, down from 6.1% in 2019, before bouncing back.
The pandemic recession will probably leave deep scars: Investments will stay lower in the near term, and global trade and supply chains will erode to some extent. On top of that, millions of people have been laid off, causing the biggest blow to America’s labor market since the Great Depression. The US Federal Reserve has stressed its concern about laid-off workers getting detached from the labor force as a result of the crisis.

The recession would be even worse if it took longer than expected to bring the pandemic under control, or if financial stress forced a number of companies into bankruptcy.

On Monday, a monthly survey from the American National Association of Business Economics found that a second wave of infections was the biggest risk to the US economy.

Emerging economies are in particular danger, because their health care systems are less resilient and they are more exposed to woes in the global economy through supply chains, tourism and reliance on commodity and financial markets, the World Bank report said.

At the same time, low oil prices, which collapsed in April, could help jump starting the economy in the initial stages of reopening, the World Bank acknowledged.

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