Considering that LeBron James was still facing an uphill battle when the National Basketball Association suspended the 2019-20 season in the middle of March, the decision not to include the upcoming seeding games in voters’ consideration for individual awards all but formalizes Giannis Antetokounmpo’s claim to the Maurice Podoloff Trophy. Forget that the 16-time All-Star managed to put together an outstanding run after the break; he normed an even 30 markers (on 55% shooting from the field), 8.2 caroms, and 9.4 dimes in steering the Lakers to an 8-2 slate. For all his exertions during the run (including against such notables as the Clippers, Bucks, and Celtics), he failed to definitively bridge the gap the reigning Most Valuable Player built early on.
Under the circumstances, James was right to focus on things he can influence, and to note the uselessness of delving in those he can’t. “I’m not disappointed because things happen,” he said in his scheduled virtual presser yesterday. “You control what you can control, and I can’t control” the schedule disrupted by the novel coronavirus pandemic. In any case, he argued, he has done more than enough to make his case for the accolade. “I think that I’ve shown what I’m capable of doing. Not only individually, but from a team’s perspective, us being Number One in the West.”
James was, needless to say, aiming to counter criticism that he built his body of work — which includes an eye-popping eight straight trips to the Finals — while situated in the so-called Leastern Conference. “To be able to have our team at the top of the Western Conference and playing the way that we were playing at that time and the way I was playing, it’s definitely a good feeling,” he disclosed. And the numbers do bear him out: he figures to be just the sixth player in league annals to post 25 and 10 for a whole season, and the oldest ever to top the assists category for the first time.
The flipside, of course, is that the Bucks aren’t merely pacing the East. Starring the ultra-efficient Antetokounmpo, they’re ahead of everyone else in the standings. They’re likewise heavily favored to make the Finals. Meanwhile, the Lakers need to deal with a crowd en route, and while stripped of the definite homecourt advantage the Staples Center would have provided. James isn’t fazed, though; he’s determined to hoist the Larry O’Brien Trophy when all is said and done, and not simply because he’s an old 35 with a fast-closing window of opportunity.
Will James be able to add a fifth MVP hardware to his mantel this year? The answer is no. Will he be able to get a fourth ring, instead? It’s much less clear, at least to those from the outside looking in. As far as he’s concerned, it’s already his to lose.
Anthony L. Cuaycong has been writing Courtside since BusinessWorld introduced a Sports section in 1994. He is a consultant on strategic planning, operations and Human Resources management, corporate communications, and business development.
After a torrid rally sparked by the Federal Reserve’s announcement in March that it would begin buying corporate debt, investment-grade bonds have stalled near record levels. — REUTERS
A breakneck rally across bond markets may slow as traders come to grips with the notion that the Federal Reserve’s support isn’t unconditional.
After a torrid rally sparked by the Fed’s announcement in March that it would begin buying corporate debt, investment-grade bonds have stalled near record levels. A similar pattern holds true for high-yield markets, where spreads are broadly trading sideways after the asset class’s best returns in a decade brought them close to pre-pandemic levels. And the central bank’s oft-repeated commitment to keeping interest rates low have locked benchmark Treasury yields into an unrelenting range close to historic lows.
The degree to which bond markets have rebounded after a trading freeze during March’s turmoil is largely the reason why they’re stalling out now. A parade of policy makers have hinted in recent weeks that the central bank won’t have to expand its balance sheet and buy bonds as aggressively as anticipated, with liquidity restored and primary markets buzzing. While bets the Fed isn’t going to be blindly buying bonds has capped gains for now, prospects that it might start again has cushioned any downside, according to Wells Fargo Investment Institute.
“There has been a slight misunderstanding between the markets and the Fed,” said Sameer Samana, Wells Fargo Investment’s senior global market strategist. “What the Fed has basically said is: ‘Our goal is to make sure we have orderly and liquid markets.’ The market has taken that to mean, ‘Okay, we’re going to buy like there’s no tomorrow.’ If the market’s able to trade efficiently, the Fed is starting to see their job as mission accomplished.”
After soaring 150 basis points in March, high-grade spreads tightened by 70 basis points in April and have dropped about 14 basis points so far in July through Friday. Junk-bond spreads have tightened 70 basis points this month, after a 380 basis-point surge amid March’s turmoil.
Weekly figures published Thursday showed that the Fed’s balance sheet edged higher over the past week—after falling for roughly a month—but remained below $7 trillion. It exploded by $3 trillion from early March to mid-June as the central bank pumped liquidity into the financial system to keep credit flowing via short-term loans and bond buying.
To be sure, there’s a reason ‘don’t fight the Fed’ is one of the most commonly deployed refrains in financial markets. The central bank has nearly unlimited firepower at its disposal to support the U.S. economy, the sheer magnitude of which was on display after the Fed slashed rates to near-zero and pumped trillions worth of liquidity into markets. Among the tools yet to be tapped are yield-curve control, an option that Federal Reserve Bank of New York President John Williams didn’t rule out in an interview Thursday.
Now, markets are largely back to normal and policy makers see the balance sheet’s decline as a healthy sign. But that’s after the Fed’s late-March pledge to buy corporate debt set of a wave of front-running flows, with credit ETFs and mutual funds absorbing record amounts of cash. As analysts downsize their forecasts for the central bank’s balance-sheet growth, investors are assessing whether that was overkill.
“People got a little bit carried away, were probably a little bit too positioned, and we forget that bonds often are kind of boring and we’re getting to that stage. If you want quick returns, it’s hard to see how you get them with some of these yields where they are,” said Peter Tchir, head of macro strategy at Academy Securities. “With investment grade and high-yield, you’re back to hoping you can clip a coupon rather than any big price appreciation.”
The slimming-down of the balance sheet also helps explain why the equity market — outside of the megatech stocks—have hit a wall as well, according to Mr. Samana. While the S&P 500 has rebounded about 45% since March’s low to erase this year’s losses, the bulk of those gains came before early June, and are largely thanks to tech heavyweights pushing the index higher. In contrast, the small-cap Russell 2000 Index is still 12% lower year-to-date.
“Equities haven’t really gone anywhere since early June, that dovetails nicely with the slowdown in the balance sheet,” Mr. Samana said. “It’s a very small sliver of the equity market that’s making all-time highs and it’s the part that not only benefits from what the Fed’s done, but also benefits from all the COVID-related things.” — Bloomberg
Even after 18 to 24 months, business travel will remain at least 25% below pre-pandemic levels and may stay down by as much as half, said Bruno Despujol, a partner at consultant Oliver Wyman. Trips for internal purposes, which account for as much as 40% of business demand, is most likely to decline. — Delta One Suite
US airlines hammered by the catastrophic loss of passengers during the pandemic are confronting a once-unthinkable scenario: that this crisis will obliterate much of the corporate flying they’ve relied on for decades to prop up profits.
“It is likely that business travel will never return to pre-COVID levels,” said Adam Pilarski, senior vice-president at Avitas, an aviation consultant. “It is one of those unfortunate cases where the industry will be permanently impaired and what we lost now is gone, never to come back.”
At stake is the most lucrative part of the airline industry, driven by businesses that accepted—however grudgingly—the need to plop down a few thousand dollars for a last-minute ticket across the US or over an ocean. While millions of customers fly rarely, road warriors are constantly in the air to close a deal, depose a witness or impress a client. Business travel makes up 60% to 70% of industry sales, according to estimates by the trade group Airlines for America.
That’s under threat in the wake of an unprecedented collapse in passengers that started four months ago. Half the respondents in a survey of Fortune 500 CEOs said trips at their companies would never return to what they were before COVID-19, according to Fortune magazine.
Even industry leaders such as Delta Air Lines Inc. Chief Executive Officer Ed Bastian are bowing to the inevitable.
“I don’t think we’ll ever get back entirely to where we were in 2019 on the volume of business traffic,” Mr. Bastian said July 14 after the company reported an adjusted quarterly loss of $2.8 billion, a record. United Airlines Holdings Inc. discloses results Tuesday, followed by Southwest Airlines Co. and American Airlines Group Inc. on Thursday.
Even after 18 to 24 months, business travel will remain at least 25% below pre-pandemic levels and may stay down by as much as half, said Bruno Despujol, a partner at consultant Oliver Wyman. Trips for internal purposes, which account for as much as 40% of business demand, is most likely to decline.
‘LOCKED DOWN’
At Sunnova Energy International Inc., travel next year may prove to be just half of 2019 levels and possibly as little as a quarter, said Chief Executive Officer John Berger. The Houston-based residential solar company, which used to put executives in premium seats or coach depending on the length of the trip, is planning to hold more meetings by video conference.
“We’re pretty much locked down right now,” Mr. Berger said. “We’re not doing much travel—really rare. Now, I’m starting to get worried if we’re going to do much travel in Q1” of next year.
Premium domestic demand collapsed in April with the rest of the market, and those fares cratered in May to the lowest in data going back to 2008. This week, a last-minute ticket for American’s luxury first-class service between New York and Los Angeles listed for $3,322, compared with $8,000 when those flights began in 2014.
Warren Buffett, who returned to airline investing in 2016 after years of shunning the stocks, exited his stakes in American, Delta, Southwest, and United earlier this year as the novel coronavirus caused a collapse in flying.
“The world changed for airlines,” Mr. Buffett told Berkshire Hathaway Inc. investors in May.
Carriers are now weighing job cuts after $25 billion in federal payroll aid expires at the end of September. Southwest said Monday that about 28% of its employees have agreed to leave the company temporarily or permanently. American said last week it would warn 25,000 employees, or 29% of its US workforce, that they’re at risk of losing their positions. United has sent notices of potential layoffs to 45%.
The airline industry is well-versed in failure, with bankruptcies dotting the first two decades of the 21st century after years of heedless growth. Predictions of business travel’s demise proved premature after the Sept. 11 attacks and again after the Great Recession of 2008–09.
Consolidation and job-cutting at the airlines helped drive those comebacks, and some carriers predict the eventual return of their cash-cow customers.
“We believe business travel will come back and come back strong as ever,” said Andrew Nocella, United’s chief commercial officer. “But it will take about six to 12 months to work through the system once a vaccine or treatment becomes widely available.”
VIDEO CONFERENCES
What’s different now isn’t just the depth of airlines’ travails, however. It’s also the opportunities for technological workarounds at the banks, technology giants, law firms and other professional-services companies that once shelled out for first-class seats.
US passengers counts plummeted more than 95% at their worst, with virus-fearing travelers of all types shunning the tight quarters that airlines relied on to maximize revenue from each flight.
Even with some leisure travel perking up, the numbers aren’t enough, and Wall Street is offering a clear verdict: The six largest US airlines ended last week with a combined market value that’s less than the $70 billion of Zoom Video Communications Inc., whose software has made “Zoom calls” a byword in households as well as boardrooms.
Improved video conferences further lower the chances of returning to the heyday of corporate flying as companies look at travel budgets as ripe for cuts, said Eric Bernardini, a managing director at consultant AlixPartners.
“It won’t replace the need to go visit your customer, but there will be an impact on how many people are going to travel and how often,’ he said.
WARY CUSTOMERS
For now, big US carriers are orienting their schedules toward leisure destinations and domestic trips. Meanwhile, companies are grappling with a changing web of government travel restrictions at home and abroad because of the pandemic.
Columbia Sportswear Co. is revising its policies, evaluating the safety protocols of hotels, rental-car companies and ride-share providers. Health risks are joined by concerns an employee could get stuck in two-week quarantines when traveling to other countries and returning to the US.
“Face-to-face contact and visibility is important. That said, no one’s going anywhere,” said Peter Bragdon, Columbia’s chief administrative officer. “It’s pretty easy to imagine how something that was meant to be a few days of travel turns into five weeks of being caught in a snarl.” — Bloomberg
MediCard helps members avail services easier through its mobile app
Looking for an available doctor for your medical need, scheduling an appointment, and securing a letter of authorization for laboratory tests have used to be quite difficult and time-consuming, especially for on-the-go people. With digital technology, however, healthcare can be accessed with a few taps of a smartphone.
Getting comprehensive healthcare services when they are needed is now much easier for MediCard members with the MediCard Access Express (MACE) mobile application.
MACE is a free mobile app that offers MediCard members a convenient means to avail of healthcare services from the country’s leading Health Maintenance Organization (HMO) run by doctors.
MediCard members can use MACE to view information about their health plan, the status of their reimbursement, their utilization (and their dependents’ utilization, with consent), and various MediCard perks they can avail of.
Moreover, the MACE app is also designed for members to conveniently search for accredited dentists, doctors, and clinics/hospitals; set up an online consultation with accredited doctors; as well as request for approval of consultation or laboratory/diagnostic tests.
A very impressive feature of MACE is the unique QR code provided for each member under the ‘Member Information’ tab. From scanning this QR code, clinics or hospitals can instantly know everything that is needed to know about a member and his or her account. Members can also customize their profile picture under ‘Member Information’, whether they select a photo from their gallery or take a selfie.
Under the ‘My Utilization’ tab on MACE, members can see the history of their past MediCardavailments. A list of Dentists, Doctors, Hospitals, and Perks are also accessible from their respective tabs.
MACE also helps members request for approval of consultation or tests easily. They should first register their PIN by going to Account Settings and keying in their four-digit PIN. They can then go ‘Member Information’, tap the plus (+) icon at the lower right, and hit ‘Request Approval’.
Members can select either consultation, maternity consultation (if included) tests, or online consultation under ‘Request Approval’. The app will then take members to a list of accredited clinics and hospitals for them to choose from. Upon tapping the preferred choice, they can select a fitting time to consult with the available doctor for their specific need. A request form will then be available for them to download within three days.
For laboratory/diagnostic tests, they simply take a photo of the doctor’s request and attach it to the request approval using the MACE app before they select from a list of available clinics or hospitals. When the request is completed, it will be routed for approval. The status of request approvals can be checked anytime under the ‘My Approval Request’ tab.
MACE app is greatly helpful not only for the appointments of members, but also for those of their dependents. Members can simply register dependents in few taps on the MACE app.
In order to use the app, members must first fill in the required information and agree to data privacy and to the terms and conditions.
MediCard now makes it easier for members to avail of their services through MediCard Access Express app. MACE can be downloaded either from Google Play or the Apple App Store.
Beijing’s polarizing law, which took effect this month, upended Hong Kong’s tech scene just as it seemed on a path to becoming a regional hub. Their actions may foreshadow similar decisions from Internet giants like Facebook Inc., Alphabet Inc.’s Google, and Twitter Inc., all of which confront the same set of uncertainties.
China’s sweeping national security law has forced technology firms to reconsider their presence in Hong Kong. The nimblest among them—the city’s startups—are already moving data and people out or are devising plans to do so.
Beijing’s polarizing law, which took effect this month, upended Hong Kong’s tech scene just as it seemed on a path to becoming a regional hub. Entrepreneurs now face a wave of concern from overseas clients and suppliers about the implications of running data and internet services under the law’s new regime of vastly expanded online policing powers. Many are making contingency plans and restructuring their operations away from Hong Kong.
Their actions may foreshadow similar decisions from Internet giants like Facebook Inc., Alphabet Inc.’s Google, and Twitter Inc., all of which confront the same set of uncertainties. The larger firms are taking time to fully assess the impact of the new law, while sentiment in the city itself is dour with about half of US business people saying they plan to leave, according to a recent survey by the American Chamber of Commerce in Hong Kong.
“We are now in a dilemma. If we follow the law in Hong Kong, we may violate other countries’ regulations,” said Ben Cheng, co-founder of software company Oursky. “We worry that people will not trust us someday if we tell them we are a Hong Kong-based company.”
Twelve-year-old Oursky has already had trouble in the short period since the law came into force, with some foreign cloud service providers refusing to work with Hong Kong-based entities and reviewing the practice, Mr. Cheng said without elaborating. To circumnavigate these issues, his company will set up offices in the UK in about a year and then expand to Japan.
Tech companies that handle data are particularly vulnerable under the new law. Police can ask them to delete or restrict access to content deemed to endanger national security, with non-compliance punishable with a fine of HK$100,000 (around $13,000) and six months in prison for representatives of infringing publishers. Such provisions put technology companies under “tremendous risk and liability,” said Charles Mok, a Hong Kong lawmaker. “It’s a signal to these companies to be very careful. If you want to be safe and you don’t want the uncertainty, then maybe you have to leave Hong Kong.”
In recent years, the global financial center has grown into an attractive destination for fintech entrepreneurs, and its close proximity to Shenzhen and the so-called Greater Bay Area has helped foster research and development ties between startups and Chinese universities. Hong Kong had been expected to reach $1.7 billion in datacenter revenue by 2023, rivaling nearby Singapore whose server market brought in $1.4 billion last year, according to data from Structure Research. All that is now under threat.
More than half of Measurable AI’s clients are US-based. The Hong Kong firm tracks business receipts and provides transactional data to hedge funds and corporations, many of whom have expressed concern about how data trade may be affected by the Beijing law as well as Washington’s retaliatory measure of rescinding Hong Kong’s special trade status. “Right now might be a good time for us to rethink how we can restructure or have the operations outside of Hong Kong,” co-founder Heatherm Huang said, adding that the company’s accelerating plans to migrate parts of its business development and sales to Singapore and New York.
“Doing a startup in Hong Kong is already difficult. It’s a super expensive city,” Scott Salandy-Defour, co-founder of energy-tech startup Liquidstar, told Bloomberg News. Even before the new law, the situation in the city was fraught with US-China tensions over everything from trade to human rights. Investors have become very cautious about people and businesses with ties to China and the new law “is like the last nail in the coffin,” said the entrepreneur, who is now planning to relocate to Singapore.
One founder of an edtech venture, who like several executives interviewed asked not to be identified because of the sensitivity of the issue, said their company had transferred all its data to portable offline storage in case there was a need to leave Hong Kong in the future.
“This would be just a short-term phenomenon. I think after they understand the society is more stable, businesses will come back,” said Terence Chong, an associate professor of economics at the Chinese University of Hong Kong. “Hong Kong is the gateway to China. If they want to have access to China’s market, it is the best place for them.” Supporters of the law see it as a necessary step to restore investor and business confidence by curbing months of sometimes-violent unrest that have rocked the former British colony.
For some, the allure of closer integration with China through the Greater Bay Area is too good a chance to pass up. “I think Hong Kong can still play the role it’s always played, bringing international and Chinese players in technology closer together,” said Tony Verb, co-founder of GreaterBay Ventures. “I don’t see reasons right now to run away.” — Bloomberg
The office market is expected to bounce back from the effects of the coronavirus pandemic in around 18 to 24 months, said real estate services firm JLL Philippines.
In an online forum held on July 17, Janlo de los Reyes, head of research at JLL Philippines, discussed the changes that players in the office market should expect and what they can do in anticipation of these changes.
CHANGES IN THE SHORT-TERM (ONE YEAR)
Tenants will prioritize the health and well-being of their employees as the possibility of contracting the virus remains very imminent, focusing on proper sanitation in their facilities and implementation of internal health protocols. They will also shift to remote work setups or shed memberships in flexible workspaces to help bolster their cash flow.
“A lot of their current occupiers are now preferring to stay at home. Even if they do have to sacrifice, for example, internet connectivity and the collaborative work environment, at least they are able to prioritize their safety and are still able to work on what they need to do within their respective homes,” said Mr. de los Reyes.
In order to adapt to this, operators must ensure that they are adhering to health and sanitation guidelines imposed by the government. They must also consider adjusting the layout of their facilities given the changes brought about by social distancing, such as limited room capacity. According to Mr. de los Reyes, serviced offices have begun to appeal more to occupiers over flexible workspaces due to their more enclosed setups.
“We’re trying to observe physical distancing, and it’s quite difficult to manage or even control the movement and the circulation of employees within the office premises. That’s why we think that co-working spaces, which operate under a much more open and collaborative layout, will be much more threatened,” he said.
CHANGES IN THE MEDIUM-TERM (ONE TO THREE YEARS)
At this point, the priority of tenants will have shifted to business continuity and operational resilience. There may also be an increase in work mobility programs among organizations; this includes initiatives such as the splitting of bigger sites into satellite offices scattered across various locations.
“The motivation behind it is that companies will want to be located near to where their employees are. This is for them to be able to ensure that they address the shortage of public transportation,” said Mr. de los Reyes, who added that operators should stay in touch with clients and extend their help when needed.
“At the end of the day, this pandemic will be gone, whether that’s going to be in 2021 or 2022… it’s important that we make sure that we are connected within that ecosystem that we operate in so that when the market resumes or stabilizes, at least we still have those relationships ongoing and that we’ve done our part in helping them also tide over this pandemic,” he said.
CHANGES FOR THE LONG-TERM (AFTER THREE YEARS)
Practices that employees adopted formerly as a means to deal with the pandemic will eventually become a part of their work lifestyle. Health and well-being will remain a priority; remote work arrangements, provision of seats in flexible workspaces, and establishment of satellite offices will become the norm.
This emphasis on flexibility may change the way operators offer their leases. “A lot of occupiers are looking for the most flexible arrangement and the shortest lease that they can find to have that flexibility to close shop or expand their facility. This goes back to the uncertainty that we’re seeing in the market,” said Mr. de los Reyes.
He also believes that there will be an increase in demand for high-quality flexible workspaces among tenants. “A lot of the operators are going to compete in terms of how to retain or attract new demand coming in. I advise them to take a look at the overall ecosystem and analyze how to enhance that collaborative environment while maintaining that safety among their occupiers,” he said.
“The State of Real Estate, Offices, Co-working Spaces: Moving Forward to the New Normal” was an online forum organized by co-working space OpenSpace.
Day traders seeking help for gambling addiction have tripled in number in South Korea, as COVID-19 social distancing and working-from-home has freed up more time for online stock market trading, data showed.
Retail investors, known locally as ants, were a force in a 50% stock-price surge after a virus-induced sell-off in March.
From then through May, however, those seeking help for trading-related addictive behavior reached 214, showed data from the Korea Center on Gambling Problems. The growth rate eclipsed the overall 16% rise in calls seeking help.
The trend is a worrying sign of things to come should social distancing practices such as work-from-home become the norm, experts said, as isolated individuals have even fewer mechanisms such as peer support to check addictive behavior.
Compulsive stock trading also lacks the social stigma that may act as a deterrent toward traditional forms of gambling, even though the stimulation behind both is similar, they said.
South Korea has not enforced any virus-busting lockdown measures, even during the height of the outbreak in the country over February and March. Nevertheless, people and businesses by and large have followed government guidelines and refrained from social gatherings and instituted work-from-home arrangements.
One such individual was a 35-year-old bank employee surnamed Lee. He has been trading shares online for over a year since hearing of a friend who made a windfall through frequently buying and selling stocks based on rumor and speculation.
Though Lee has seen some success—once making a profit of several hundred thousand dollars in a single trade—increased trading time afforded by working-from-home culminated last month in him losing 1.2 billion won ($1 million) over five days.
On the insistence of his wife, he said, he subsequently sought help from a gambling addiction counselor.
“We tend to see an influx of people seeking help after a huge market dive,” said Kim Yeon-su, treatment manager at the Korea Center on Gambling Problems help center in Seoul. “It happened with Bitcoin and now it’s happening with stocks.”
Active trading accounts—the bulk of which belong to retail investors—rose 2.8 million from mid-January through mid-July, versus 1.6 million in the same period last year, financial association data showed.
The surge was reflected in the July listing of SK Biopharmaceuticals Co. Ltd., where each share on offer for retail investors attracted 323 prospective buyers whose down-payments totalled 31 trillion won. The successful buyers saw their investment more than quintuple in four days.
Investor message boards on South Korea’s dominant internet search portal see high traffic throughout trading hours with posts such as, “I want to become a king ant” and “I was robbed today as usual”, plus discussion of obscure stocks and preferred shares.
Mental health experts said trading can become high-stakes gambling, with little to hold back the trader when they can trade easily online at home and often on credit.
“Some of these people are buying, selling, buying, selling… To become a gambler, you need immediate stimulation to the brain. Invest in stable things, wait three months—they don’t do this,” said psychiatrist Shin Young-chul at the Kangbuk Samsung Hospital.
“For a person for whom 400 million won goes back and forth in a day, can they stay engaged in their job that earns 2 million won a month?” — Reuters
